NATIONAL UNIVERSITY OF SCIENCE AND TECHNOLOGY

Department of Electronic Engineering

Engineering Management [TEE 3255]

1: Introduction to
Engineering Management
 Course Outline

1. Introduction to Management for Engineers

2. Functions of Engineering Management (Planning)
3. Functions of Engineering Management (Organizing)
4. Functions of Engineering Management (Leading)
5. Functions of Engineering Management (Controlling)
6. Business Essentials (Cost Accounting, Financial Accounting
and Management)
7. Business Essentials (Marketing Management)
8. Operational Excellence
9. Engineers as Managers/Leaders
 Google Classroom

Use your NUST students’ email address e.g.

n01911161q@students.nust.ac.zw , to join the class
with this class code

7nljf5w
Introduction
 Introduction

• What do engineers do in industry?

• Code
• Design
• Optimise
• Remodel
• Integrate systems
• Manage
 Introduction

• In our modern-day economy, customers’ needs

are changing rapidly, the marketplace is becoming
global, and technology is advancing at an ever-
increasing speed.
• To maintain competitiveness in such a challenging
environment, companies need effective leaders
who understand both technology and business.
 Introduction

• Notable changes in the marketplace include:

1. Internet-based communication, delivery, and
business transactions;
2. Customer references and buying habits;
3. New technologies related to data processing;
4. Business alliances on a global basis;
5. Heightened competition in industry.
 Introduction

• The course will cover three distinctive sections to

prepare STEM professionals and managers for
meeting the global challenges:
1. Engineering management fundamentals,
2. Business management skills,
3. Leadership essentials,
• The following “three-decker leadership
architecture” forms the design basis of this
course.
 Introduction

STEM Leadership

Strategic differentiation Operational excellence

Ethics
Creativity and innovation Globalisation
Marketing
Cost accounting Financial Management

Planning Organising Leading Controlling

 Introduction

• Companies in industry need to pursue strategic

differentiation and operational excellence in the
products/services that they offer in order to
sustain and extend market competitiveness and
achieve long-term profitability (Chang 2014)
 Introduction

• In so far as strategic differentiation is concerned,

market competitiveness must be built on
product/service innovations such that these value
packages offered to customers are constantly
renewed and uniquely differentiable from the
competition.
 Introduction

• Operational excellence is also important, as

companies need to minimize wastes, streamline
operations, and enhance productivity to maximize
profitability
 Introduction

• Operational excellence addresses issues related to

process efficiency, cost reduction, time to market, and
doing all things well in order to improve the short-term
profitability of their enterprise
• New Internet-based enablers such as big data,
analytics, and cloud computing are becoming available
to apply
 Introduction

• All STEM professionals and managers face global

challenges that have six dimensions. These are (1)
inside, (2) outside, (3) present, (4) future, (5) local,
and (6) global.
 Introduction
Manage/Lead/Act/Think Focuses
Inside Core competencies, cost and quality control, production
and process excellence
Outside Emerging technologies, supply chains, market orientation,
customer relationships
Today Implement all projects to achieve operational excellence,
do the thing right
Tomorrow Apply creativity and innovation, do the right things, and
lead in creating strategic differentiation
Local Build local strengths, unique partnerships, implement
local adjustments and customization
Global Global resources, global scale and scope, global mind-
set, global partnerships
Why Engineers as Managers
 Why Engineers as Managers

• Engineers with excellent managerial skills and

superior business acumen are needed to lead and
turn technological innovations into profitability.
• Engineers with proper management training have
great opportunities to make valuable and lasting
contributions (Chang 2005; Merino and Farr 2010)
 Why Engineers as Managers

• “Engineers tend to be very technically focused.

The business needs them to mix this with a
commercial outlook and customer-centric
mindset.” Jonathan Brown (Chief operating officer
| Rolls-Royce Nuclear)
 Why Engineers as Managers

• An estimated 75%+ engineers choose the

technical management route, and perform
management tasks
• Hence the need to train engineers on how to
execute management responsibilities
 Why Engineers as Managers

• National Science Foundation estimated in 2000

that about 46% of U.S. engineers and scientists
were actively working in managerial/
administrative capacities.
 Why Engineers as Managers

• “We’re focusing on building a dual career path in

engineering, and celebrating the management and
leadership route as well as the technical option.”
Global HR director for engineering multinational
engineering firm
 Why Engineers as Managers

• Vacancy:
• Principal Electronic Design Engineer
• to provide technical and commercial direction
within the engineering field. Matching business
acumen with a detailed understanding of
analogue and digital electronics...
 Why Engineers as Managers

• Companies providing services need talented people who

are in a position to innovate new ways to make present-
day services cheaper, faster, better, and more
convenient for users.
• As the need for highly skilled professionals in the
service sectors becomes evident, it is advisable for
STEM professionals to prepare themselves well to
capitalize on such new opportunities offered in the
future, and not to limit themselves to only pursuing
product related job opportunities
Definitions & Explanations
 Definitions & Explanations

• Management - The process of achieving company

goals effectively and efficiently by engaging in the
four major functions of planning, organising,
leading, and controlling of company’s resources
while meeting the diverse expectations of its
stakeholders.
 Definitions & Explanations

• Management - The process of achieving company

goals effectively and efficiently by engaging in the
four major functions of planning, organising,
leading, and controlling of company’s resources
while meeting the diverse expectations of its
stakeholders.
 Definitions & Explanations

• Organizational Effectiveness is the degree to

which the organization achieves a stated goal, or
succeeds in accomplishing what it tries to do.
“Doing the right things”
• Organizational Efficiency refers to the amount of
resources used to achieve an organizational goal.
“Doing the things right” – Peter Drucker.
• Is it possible to be effective and yet
inefficient?
Definitions & Explanations
 Definitions & Explanations

• Engineering Management is a specialized form of

management that is concerned with the
application of engineering principles to business
practice in order to organise and direct people
and projects.
 Definitions & Explanations

• Typical expectations of these stakeholders include:

1. Shareholders: Return on investment, dividends, earnings per share,
and appreciation in stock price over time
2. Customers: Quality of products, acceptable services, flexibility of
company to accommodate changing customer needs, efficient
delivery, and competitive prices
3. Suppliers: Financial stability, market share position, quality
production, collaboration efficiency, and on-time payment
4. Employees: Innovative company policy and culture, good working
conditions, stable employment, and competitive salary and benefits
5. Community: Environmentally clean, tax contribution, social
responsibility, ethically acceptable practices, and good corporate
citizenship
 Definitions & Explanations

• Top-level managers (strategic managers)

• senior executives responsible for the overall
management and effectiveness of the organization
• focus on long-term issues
• emphasize the survival, growth, and effectiveness of the
firm
• concerned with the interaction between the organization
and its external environment
• titles include Chief Executive Officer (CEO), Chief
Operating Officer (COO), company presidents and vice
presidents
 Definitions & Explanations

• Middle-level managers (tactical managers)

• located between top-level and frontline managers in the
organizational hierarchy
• responsible for translating strategic goals and plans into
more specific objectives and activities
• traditional role was that of an administrative controller
who bridged the gap between higher and lower levels
• provide operating skills and practical problem solving the
keep the company working
 Definitions & Explanations

• Frontline managers (operational managers)

• lower-level managers who supervise the operational
activities of the organization
• directly involved with nonmanagement employees
• increasingly being called on to be innovative and
entrepreneurial
• titles include supervisor or sales manager
 Activity 1 – Class Discussion

• Can you suggest any company goals of an online

game development company to achieve?
 Activity 1 – Solution

• Become the leader of the industry.

• Integrate different elements from novels, comics,
movies and music in order to create great games.
• Maintain a market share of 20% in the industry.
• Introduce a new product next year.
• Achieve a 10% growth in sales in a year.
• Keep cost of goods no more than 50% of sales.
• Achieve a net profit of $2 million in next year.
 Definitions & Explanations

• Work is the task performed to add value to the

company.
• Performing the work involves the use of
resources (e.g., time, money, energy, tools, human
efforts, technologies, and facilities) and applicable
procedures.
 Definitions & Explanations

• There are three types of work:

1. Management work: Plan, organize, lead, and control
the efforts of self and others; this requires thinking.
2. Technical work: Specialized, non management work
done by engineering managers if others cannot do it
for them; this requires doing.
3. Operating work: Management and technical work that
has been delegated to others; this requires
monitoring and controlling
 Definitions & Explanations

• Chain of Command refers to the chain of direct

authority relationships between superiors and
subordinates. This is derived from the traditional
military systems
 Definitions & Explanations

• According to the Principle of Unity of Command, an

individual worker reports to a single superior.
Boss Boss
Boss
1 2

Staff Staff
 Definitions & Explanations

• Efficiency • Effectiveness
• Efficiency refers to • Effectiveness refers
the accomplishment to the
of a given task with accomplishment of
the least amount of tasks with efforts
effort. that are
• Being efficient means commensurate with
not wasting the value created by
resources these tasks.
 Definitions & Explanations

• Strategic Decisions - are those that set the

direction for the unit, department, and company.
• These decisions determine what are the right
things to do. Examples include which new markets
to pursue, what new products to develop, who
should be engaged as supply chain partners, and
when the right time is to acquire which new
technologies to enhance competitive advantages.
 Definitions & Explanations

• Operational (Tactical) Decisions - are those that

specify ways to implement a specific task, project,
or program. They define how things are to be done
correctly.
Employment Trend in Industries
 Employment Trend in Industries

• Graduates of STEM disciplines are typically

employed in industrial companies, which design,
produce, market, and service products or services
or both to their business clients or individual
consumers in the marketplace.
 Employment Trend in Industries

• Over the years, significant changes have occurred

in each of these sectors due to technological
advancement, market expansion, rapid change in
customer needs, and globalization.
 Employment Trend in Industries

• Enterprises in industry engage highly skilled STEM

professionals to perform various value-adding
tasks
 Employment Trend in Industries

• Engineers who perform well as technical

contributors pay attention to the following steps:
1. Demonstrate technical competence and innovative
capabilities
2. Practice people skills - “There is never a good reason to
be unkind.”
3. Show an unfailing reliability
4. Be proactive - If opportunities do not knock, build a door
5. Work skills
6. Exhibit a readiness for advancement
Effective Engineering Manager & their work
 An Effective Engineering Manager

• Engineering managers:
• Decisional
• Informational
• Interpersonal
 Activity 2 – Class Discussion

• Identify the managerial role performed in each of

the following activities:
1. Training
2. Budgeting
3. Hold meetings
4. Organising resources to develop new
product
5. Hold press conference
6. Performing activities that involve outsiders
 Activity 2 – Solution

1. Training - Interpersonal
2. Budgeting - Decisional
3. Hold meetings - Informational
4. Organising resources to develop new product -
Decisional
5. Hold press conference - Informational
6. Performing activities that involve outsiders -
Interpersonal
 An Effective Engineering Manager

• Effective managers perform 3 major roles:

• Have engineering training and specific technical
knowledge and experience
• Have a clear vision to lead
• Are rational and organized
• Focus on what customers are looking for
• Practice a high standard with respect to ethics,
fairness, and honour.
• Decide what should be done (strategic)
• Determine how things are to be done (tactical).
 Nature of Work by Engineering Managers

Work with
superior

Peers, staff, Engineering With self

people manager (manage own time)

Work with
subordinates
 Nature of Work by Engineering Managers

Human
Resources

Financial
Resources
Manager Planning→ Organising→Leading→ Controlling Goals
Physical
Resources

Information
Resources
 Nature of Work by Engineering Managers

• Engineering managers plan, organize, lead, and

control people, teams, money, technology,
facilities, and other resources to achieve the
business objectives of the company.
• To ensure company operations for the short term,
they pay attention to problem solving and conflict
resolution.
• Engineering managers work through people.
Management Skills
 Management Skills

• Conceptual skill involves the manager’s thinking,

information processing, and planning abilities.
• It means the ability to think strategically—to take
the broad, long-term view—and to identify,
evaluate, and solve complex problems.
• Top management needs this ability more because
of their role in decision making, resource
allocation, and innovation.
 Management Skills

• Human skill is the manager’s ability to work with

and through other people and to work effectively
as a group member.
• Human skill is demonstrated in the way a manager
relates to other people, including the ability to
motivate, facilitate, coordinate, lead, communicate,
and resolve conflicts.
 Management Skills

• Technical skill is the understanding of and

proficiency in the performance of specific tasks.
• Technical skill includes mastery of the methods,
techniques, and equipment involved in specific
functions such as engineering, manufacturing, or
finance.
Management Skills
The Environment
 The Environment

• Business Environment refers to the combination

of internal and external factors that affect how the
company functions.
• The business environment can include factors
such as: clients and suppliers; its competition and
owners; improvements in technology; laws and
government activities; and market, social and
economic trends.
The Environment
 The Environment
Basis for Comparison Micro Environment Macro Environment
Macro environment refers to
Micro environment is defined as
the general environment, that
Meaning the nearby environment, under
can affect the working of all
which the firm operates.
business enterprises.
PESTLE, i.e. Population &
COSMIC, i.e. Competitors,
Demographic, Economic,
Organization itself, Suppliers,
Elements Socio-Cultural, Technological,
Market, Intermediaries and
Legal & Political and
Customers.
Environmental.
Nature of elements Specific General
Are these factors
Yes No
controllable?
Influence Directly and Regularly Indirectly and Distantly
The Environment
Management in the 21st Century
 Management in the 21st Century

• “The best way to arrive at the beating heart of

great management is to have less of it. This is the
Google way, and it works.”
• Do you agree?
 Management in the 21st Century

• Tomorrow’s industry will be quite different from

that of the recent past because of advancements
in technology and the increased sophistication of
customers (Groen et al. 2015).
 Management in the 21st Century

• Four key elements are new elements in business

today
Internet Globalization

21st Century
Management

Knowledge Collaboration
Management Across
“Boundaries”
 Management in the 21st Century

• It is important for today’s engineers to proactively

anticipate the future, recognize the significant
changes lying ahead, and prepare to seize the new
opportunities associated with these major
changes
 Future Trends

• The common underlying threads among these

trends appear to be:
• Effectiveness
• Efficiency
• Integration
• All of these trends have important effects on how
business priorities are set and how companies are
run.
 Future Trends

1. Customer Focus
• Speed of customer service
• Customer self-service
• Integrated solutions for customers
• Customized service and sales
• Consistent and reliable service
• Transparent sales process
• Continuous improvement in customer service
• Technology-enabled services
 Future Trends

2. Enterprise Resource Planning and Application

Integration
 In practice, the deficiencies created by poor, uncoordinated
transactions between the functional groups more than
offset the benefits of the local optimization they achieved.
 Future Trends

3. Supply Strategy
 Knowledge-economy companies form flexible supply
chain partnerships to increase the speed to market and
vary the product/service features to better satisfy the
ever-changing needs of customers.
 Outsourcing many of their noncore operations to
technological and marketing expertise of the networked
partners.
 Future Trends

4. Knowledge Management
 Refers to activities related to the preservation and
application of corporate expertise or know-how to
create competitive advantages (Tiwana 2015; Hislop
2013).
 Business success depends on innovation and the
expertise of competent knowledge workers, whose
insights need to be properly preserved by
documentation, knowledge sharing, recruitment, and
retention.
 Future Trends

5. Changes in Organizational Setup

a) Virtual organisations - these companies retain core
competencies and outsource everything else to selected
service providers e.g. Dell
b) Vertical integration based organisations – they supply
specialized parts, designs, and services to client
companies under contracts e.g. Cisco
 Old & Knowledge Economy Companies

 Old economy companies:

 Are of a pyramidal structure
 Are capital intensive
 Have business models centred around fixed assets,
working capital, and economies of scale.
 Deploy in-house capabilities.
 Emphasise self-sufficiency, stability, and
incremental growth
 Old & Knowledge Economy Companies

 Knowledge Economy Companies:

 Centre on a small number of core operations, outsource
noncore activities (manufacturing, accounting, procurement,
janitorial services etc.), and are virtually integrated.
 Have permanent staff to advance technologies, but they
assume a predominantly web-like organizational design that
creates links & networks
 Aim to achieve future growth by way of networked
partnerships
 Are idea intensive, as ideas are the key assets in a
knowledge-based economy.
 Old & Knowledge Economy Companies

 Knowledge Economy Companies ctnd:

 The assets are in employees’ heads, not physically
constructed on the ground. Because of workforce mobility,
this is a significant risk factor for knowledge economy
companies.
 Provide digitisable goods and services as well as
commodity-type goods
 Derive strength from mass customization, wherein
customers are given tools to design individually preferred
products. Such choice boards allow companies to first sell
and then produce.
 Old & Knowledge Economy Companies

 Knowledge Economy Companies ctnd:

 Sometimes collaborate even with competitors to achieve
win–win solutions.
 Empowered employees make decisions that center on
creating competitive advantages
 Embrace digitisation through the deployment of suitable
enterprise integration software systems. E.g. Bank
transactions: A transaction by a bank teller costs $1.25,
compared with 54 cents by phone, 24 cents by ATM, and 2
cents by the Internet.
 Characteristics of Progressive
Companies
 Knowledge economy companies that ensure
business success in the marketplace:
1. strategically utilize Internet-based technologies
2. invent innovative business models
3. create supply chain networks
4. empower a diversified workforce
5. pursue customer satisfaction
 Strategies To Make Companies Great in
the 21 Century
st

 For companies to succeed in the 21st century,

several corporate values are critical:
 Speed
 Talents – best companies are able to attract, empower to
innovate, and retain the best people want to stay
 Market dominance
 Customer orientation - Follow what customers want and create
customer-driven supply chains
 Efficiency
 Outsourcing - Cisco Systems is known to have dropped in-house
R&D in favour of buying start-up companies for its technological
needs.
 The Challenges Ahead

 There will be an increased demand for services

as related to health care, professional
advisement, retail trade, leisure and hospitality,
governmental services, transportation,
education, financial activities, information
services, and others in the global marketplace.
 The Challenges Ahead

 To confront the management challenges of the

twenty-first century, STEM professionals and
leaders need to manage from the inside as well
as from the outside, to lead from the present to
the future, and to act locally and think globally.
 Contributions in the 21st Century

• Creates strategic differentiation and operational

excellence for their enterprise.
Contributions in the 21st Century
 Contributions in the 21st Century

 Best managers and companies deliver all four

Cost
Innovation
Competitiveness

Competitive
Advantage

Quality Speed
 Contributions in the 21st Century

 Engineers will play an increasingly important

role in the 21st century through:
 Applying Technologies
 Applying Innovations
 Value Addition to E-Transitions - apply web-based
technologies to improve efficiency
 Management of customers, knowledge, and
connection
 Social Responsibility and Leadership
Conclusion
 Conclusion

• Engineering management:
• Ensures strategic differentiation (in new products
and services) and operational excellence (process
efficiency and productivity)
• Focuses on actively pursuing creativity and
innovation in an ethical manner
• Utilises basic skills in managerial fundamentals
(planning, organizing, leading, and controlling) and
business fundamentals (accounting, finance, and
marketing management).
End of Introduction to Engineering
Management