Cebu Institute of Technology

University
N. Bacalso Avenue, Cebu City, Philippines
COLLEGE OF ENGINEERING AND ARCHITECTURE
Department of Industrial Engineering

COURSEWARE
ES034 | ENGINEERING MANAGEMENT
Week 8

Adopted by:
ENGR. ANTONIETTE M. ALMADEN
ENGR. ANNA MARIE A. GRANADEROS
ENGR. ARIES M. RIVERO
ENGR. ELLA MARIE Y. BARRIOQUINTO

Second Semester
AY 2021 - 2022

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 LEADING AND
CONTROLLING

Types of Organization,
Organizational Structure,
Definition and Staffing Procedure,
Power & Leadership
Controlling

INTENDED LEARNING OUTCOMES

 Discuss the nature of leadership and enumerate the important leadership traits and
behaviors
 Explain why and how managers control
 List and discuss the steps in control process
 Enumerate and define the common control systems and techniques

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 LEADING AS A MANAGEMENT FUNCTION

The Nature of Leadership

Leading one of the four functions that constitute the management process. Planning sets the
direction and objectives; organizing brings together resources to turn plans into action; leading
builds the commitments and enthusiasm for people to apply their talents to help accomplish plans;
and controlling makes sure things turn out right.
Leadership and Power

 Leadership success begins with the ways a manager uses power to influence the
behavior of other people.
 Power is the ability to get someone else to do something you want done, or to make things
happen the way you want. And, the “positive” face of power is the foundation of effective
leadership. This means using power not with the desire to influence others for the sake of
personal satisfaction.
Anyone in a managerial position theoretically has power, but how well it is used will vary from one
person to the next. Leaders gain power from both the positions they hold and their personal
qualities. The three bases of position power are reward power, coercive power, and legitimate
power. The two bases of personal power are expertise and reference.
The three bases of position power:
1. Reward power is the ability to influence through rewards. It is the capacity to offer
something of value—a positive outcome—as a means of influencing another person’s
behavior. This involves use of incentives such as pay raises, bonuses, promotions, special
assignments, and verbal or written compliments. To mobilize reward power, a manager
says, in effect: “If you do what I ask, I’ll give you a reward.”
2. Coercive power is the ability to influence through punishment. It is the capacity to punish
or withhold positive outcomes to influence the behavior of other people. A manager may
attempt to coerce someone by threatening him or her with verbal reprimands, pay
penalties, and even termination. To mobilize coercive power, a manager says, in effect:
“If you don’t do what I want, I’ll punish you.”
3. Legitimate power is the ability to influence through authority. It is the right by virtue of
one’s organizational position or status to exercise control over persons in subordinate
positions. To mobilize legitimate power, a manager says, in effect: “I am the boss;
therefore, you are supposed to do as I ask.”
Two bases of personal power:

 Expert power is the ability to influence through special skills, knowledge, and information.
It is the capacity to influence the behavior of other people because of expertise. When a
manager uses expert power, the implied message is: “You should do what I want because
of what I know.”
 Referent power is the ability to influence through identification. It is the capacity to
influence the behavior of other people because they admire you and want to identify
positively with you. Reference is a power derived from charisma or interpersonal

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 attractiveness. When a manager uses referent power, the implied message is: “You
should do what I want in order to maintain a positive, self-defined relationship with me.”
Leadership Traits and Behaviors
Leadership Traits
What personal traits and characteristics are associated with leadership success?
1. Drive—Successful leaders have high energy, display initiative, and are tenacious.
2. Self-confidence—Successful leaders trust themselves and have confidence in their
abilities.
3. Creativity—Successful leaders are creative and original in their thinking.
4. Cognitive ability—Successful leaders have the intelligence to integrate and interpret
information.
5. Job-relevant knowledge—Successful leaders know their industry and its technical
foundations.
6. Motivation—Successful leaders enjoy influencing others to achieve shared goals.
7. Flexibility—Successful leaders adapt to fi t the needs of followers and the demands of
situations.
8. Honesty and integrity—Successful leaders are trustworthy; they are honest, predictable,
and dependable.
Leadership Behaviors
How is leadership success affected by the ways leaders behave when engaging with followers?
1. A leader high in concern for task (production-centered) —plans and defines the work
to be done, assigns task responsibilities, sets clear work standards, urges task completion,
and monitors performance results.
2. A leader high in concern for people (employee-centered)—acts with warmth and
supportiveness toward followers, maintains good social relations with them, respects their
feelings, is sensitive to their needs, and shows trust in them.
Classic Leadership Styles
The figure in the right is the Blake and Mouton’s Leadership Grid which shows the four classic
style of leadership.

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1. A leader identified with an autocratic
style, the authority-obedience manager,
emphasizes task over people, retains
authority and information, and acts in a
unilateral, command-and-control fashion.
2. A leader with a human relations style,
the country club manager in the grid, does
just the opposite and emphasizes people
over task.
3. A leader with a laissez-faire style, the
impoverished manager in the grid, shows
little concern for the task, lets the group
make decisions, and acts with a “do the
best you can and don’t bother me”
attitude.
4. A leader with a democratic style, “high-high” team manager, is committed to both task and
people. This leader tries to get things done while sharing information, encourages participation
in decision making, and otherwise helps others develop their skills and capabilities.

Keeping in touch . . . staying informed . . . being in control: These are important responsibilities for every
manager. But control is a word like power. If you aren’t careful when and how it’s used, the word carries a
negative connotation. Yet, control plays a positive and necessary role in the management process. To
have things “under control” is good; for things to be “out of control” is generally bad.
CONTROLLING AS A MANAGEMENT FUNCTION

SUPPLEMENTARY Controlling as a Function of Management Free Principles of Management Video

VIDEO https://www.youtube.com/watch?v=Xaf4iNOKRyU

Importance of Controlling
Controlling is the process of measuring performance and making sure things turn out as
intended. And, information is its foundation.

Figure on the right shows how controlling fits

in with the other management functions.
Planning sets the directions and allocates
resources. Organizing brings people and
material resources together in working
combinations. Leading inspires people to
best utilize these resources. Controlling
sees to it that the right things happen, in the
right way, and at the right time. It helps
ensure that performance is consistent with
plans, and that accomplishments
throughout an organization are coordinated in a means–ends fashion. It also helps ensure that
people comply with organizational policies and procedures.

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Types of Controls

One of the best ways to understand

control is in respect to the open-systems
perspective shown in the figure. It shows
how feedforward, concurrent, and
feedback controls link with different
phases of the input–throughput–output
cycle. Each type of control increases the
likelihood of high performance.

1. Feedforward Controls

Feedforward controls, also called preliminary controls, take place before a work activity
begins. They ensure that objectives are clear, that proper directions are established, and
that the right resources are available to accomplish the objectives. The goal is to solve
problems before they occur by asking an important but often neglected question: “What
needs to be done before we begin?”

2. Concurrent Controls

Concurrent controls focus on what happens during the work process. Sometimes called
steering controls, they make sure things are being done according to plan. You can also
think of this as control through direct supervision. In today’s world, that supervision is as
likely to be computer driven as face-to-face. The goal of concurrent controls is to solve
problems as they occur. The key question is, “What can we do to improve things right
now?”
3. Feedback Controls

Feedback controls, also called post-action controls, take place after work is completed.
They focus on the quality of end results rather than on inputs and activities. Feedback
controls are largely reactive; the goals are to solve problems after they occur and prevent
future ones. They ask the question: “Now that we are finished, how well did we do?”

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The Control Process

The control process involves the four steps shown

in the figure. They are (1) establish performance
objectives and standards; (2) measure actual
performance; (3) compare actual performance with
objectives and standards; and (4) take corrective
action as needed.

 Step 1—Establish Objectives and Standards

The control process begins with planning when

performance objectives and standards for
measuring them are set. It cannot start without
them. Performance objectives identify key results
that one wants to accomplish, and the word key
deserves emphasis. The focus in planning should
be on describing “critical” or “essential” results that
will make a substantial performance difference.
Once these key results are identified, standards can be set to measure their
accomplishment.

 Output Standards measure actual outcomes or work results. Businesses

use many output standards, such as earnings per share, sales growth, and
market share. Others include quantity and quality of production, costs
incurred, service or delivery time, and error rates.

 Input Standards measure work efforts. These are common in situations

where outputs are difficult or expensive to measure. Examples of input
standards for a college professor might be the existence of an orderly
course syllabus, meeting all class sessions, and returning exams and
assignments in a timely fashion.

 Step 2—Measure Actual Performance

The second step in the control process is to measure actual performance. It is the
point where output standards and input standards are used to carefully document
results. Performance measurements in the control process must be accurate
enough to spot significant differences between what is really taking place and what
was originally planned. Without measurement, effective control is not possible.

 Step 3—Compare Results with Objectives and Standards

Control equation: Need for Action = Desired Performance - Actual Performance.

The question of what constitutes “desired” performance plays an important role in
the control equation. Some organizations use engineering comparisons (recording
quantitative data to closely monitor). Organizations also use historical
comparisons, where past experience becomes the baseline for evaluating current
performance. They also use relative comparisons that benchmark performance
against that being achieved by other people, work units, or organizations.

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  Step 4—Take Corrective Action

The final step in the control process is to take the action needed to correct
problems or make improvements. Management by exception is the practice of
giving attention to situations that show the greatest need for action. It saves time,
energy, and other resources by focusing attention on high-priority areas.

Control Tools and Techniques

 Project Management and Control

Project management is the responsibility for overall planning, supervision, and control of
projects. A project manager’s job is to ensure that a project is well planned and then
completed according to plan—on time, within budget, and consistent with objectives. Two
useful techniques for project management and control are:

 Gantt charts; and

 Critical Path Method/Program Evaluation Review Technique

 Inventory Control

Cost control is always an important performance concern. And a very good place to start
is with inventory. The goal of inventory control is to make sure that any inventory is only
big enough to meet immediate needs. Useful techniques:

 Economic Order Quantity (EOQ) - form of inventory control automatically orders a

fixed number of items every time an inventory level falls to a predetermined point.
 Just-in-time scheduling (JIT) - reduce costs and improve workflow by scheduling
materials to arrive at a workstation or facility just in time for use.

 Breakeven Analysis

Breakeven occurs at the point where revenues just equal costs. You can also think of it
as where losses end and profit begins. A breakeven point is computed using this formula:

Breakeven Point = Fixed Costs / (Price - Variable Costs)

Example: Suppose the proposed target price for a new product is $8 per unit, fixed costs
are $10,000, and variable costs are $4 per unit. What sales volume is required to break
even?

Breakeven Point = Fixed Costs / (Price - Variable Costs)

Breakeven Point = $10,000 / ($8 - $4)
Breakeven Point = 2,500 units

The company need to sell 2,500 units recover the cost but without profit.

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 Financial Controls

Control is all about measurement, and there are several ways that financial performance
can be measured and tracked for control purposes. The following are some of the financial
controls:

 Balance sheet - shows assets and liabilities at a point in time.

 Income statement - shows profits or losses at a point in time.

Financial controls of this nature often involve measures of the following:

o Liquidity—ability to generate cash to pay bills;
o Leverage—ability to earn more in returns than the cost of debt;
o Asset management—ability to use resources efficiently and operate at minimum
cost; and
o Profitability—ability to earn revenues greater than costs.

 Balanced Scorecards
A balanced scorecard tallies organizational performance in financial, customer service,
internal process, and innovation and learning areas. It gives top managers “a fast, but
comprehensive view of the business.

END OF COURSE.

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