Chapter 1: The Field of Engineering
Management
THE FUNCTIONS OF THE ENGINEER
Since prehistoric times, various projects were
developed by engineers:
1. Stone bladed axe
2. Pyramids of Egypt
3. Roadbuilding by the Romans
4. Production and paper and gunpowder
5. Production of steam engine
6. Manufacture of cars and household
appliances
Engineers worked on solutions for the following
specific problem concerns:
 Production of more food for a fast-growing
population
 Elimination of air and waste pollution
 Solid waste disposal
 Reduction of noise
 Supplying the increasing demand for energy
Functions of Engineering encompasses the
following areas:
 Research- process of learning about nature
and codifying this knowledge into useable
theories
 Design and development- turning a product
concept to a finished physical item
 Testing- new products or parts are tested for
workability
 Manufacturing- in charge of production
personnel or assumes responsibility for the
product
 Construction- either directly in charge of the
construction personnel or may have
responsibility for the construction process
 Sales- assists the company’s customers to
meet their needs
 Consulting- engineer works as a consultant
 Government- performing any of the various
tasks in regulating, monitoring, and
controlling the activities
 Teaching- gets employment in a school and
is assigned as a teacher of engineering
courses
 Management- assigned to manage groups of
people performing specific tasks
THE ENGINEER IN VARIOUS TYPES OF
ORGANIZATION
1. Level One- minimal engineering jobs like
retailing firms
2. Level Two- with moderate degree of
engineering jobs like transportation
companies
3. Level Three- with high degree of
engineering jobs like construction firms
WHAT IS ENGINEERING
MANAGEMENT?
- refers to the activity combining
“technical knowledge with the ability to
organize and coordinate worker power,
materials, machinery, and money”
MANAGEMENT DEFINED
“creative problem solving-process of
planning, organizing, leading, and
controlling an organization’s resources to
achieve its mission and objectives.”
REQUIREMENTS FOR THE ENGINEER
MANAGER’S JOB
1. bachelor’s degree in engineering from a
reputable school
2. a few years of experience
3. training in supervision
4. special training in engineering
management
HOW TO BECOME A SUCCESSFUL
ENGINEER MANAGER ( Kreitner)
1. ability- the capacity of an engineer manager
to achieve organizational objectives
effectively and efficiently
2. motivation to manage
3. opportunity
Chapter 2: Decision-Making
Decision-making is “the process of identifying and
choosing alternative courses of action in a manner
appropriate to the demands of the situation”
THE DECISION-MAKING PROCESS
1. Diagnose problem- the manager must
identify the problem
2. Analyze environment- identify the
constraints such as limited funds & training
(internal limitations), patents & limited
market (external limitations)
3. Articulate problem or opportunity
4. Develop Viable Alternatives
5. Evaluate alternatives
6. Make a choice- select among alternatives
representing potential solutions to the
problem.
7. Implementing decision- carry out the
decision
8. Evaluate & Adapt Decision Results
APPROACHES IN SOLVING PROBLEMS
1. Qualitative Evaluation- evaluation of
alternatives using intuition and subjective
judgement
(Stevenson) Use when:
 The problem is fairly simple,
familiar, low cost, & immediate
decisions are needed.
 2. Quantitative Evaluation- using any
technique in a group classified as rational
and analytical
Types of Quantitative Techniques
1. Inventory models
2. Queuing theory- describes how to
determine the number of service units
that will minimize both customers
waiting time and cost of service
3. Network models- large complex tasks
are broken into smaller segments
4. Forecasting- collection of past and
current information to make predictions
about the future
5. Regression analysis- a forecasting
method that examines the association
between two or more variables
6. Simulation- represent reality, on which
conclusions about real-life problems can
be used
7. Linear programming- used to produce an
optimum solution within the bounds
imposed by constraints upon the
decision
8. Sampling theory- samples of populations
are statistically determined
9. Statistical decision theory- “rational way
to conceptualize, analyze, and solve
problems in situations involving limited,
or partial information about the decision
environment”
Chapter 3: Planning Technical Activities
PLANNING DEFINED
“The management function that involves
anticipating future trends and determining the best
strategies and tactics to achieve organizational
objectives.” (Nickles & others)
PLANNING AT VARIOUS MANAGEMENT
LEVELS
1. Top management level
o Responsible for strategic planning-
process of determining the major
goals of the organization
2. Middle management level
o Responsible for intermediate
planning- process of determining the
contributions that subunits can make
with allocated resources
3. Lower management level
o Responsible for operational
planning- process of determining
how specific tasks can best be
accomplished on time with available
resources
THE PLANNING PROCESS
1. Setting Organizational, Divisional, or Unit
Goals
 to provide sense of direction
 goals- precise statement of results
sought, quantified in time and
magnitude, where possible
2. Developing Strategies or Tactics to Reach
Goals
 ways to realize the goals are called
strategies
 strategy is a course of action aimed
at ensuring that the organization will
achieve its objectives while tactic is
a short-term action taken by
management to adjust to negative
internal or external influences.
3. Determining Resources Needed
4. Setting Standards
 “a quantitative or qualitative
measuring device designed to help
monitor the performances of people,
capital goods, or processes.”
TYPES OF PLANS
1. Functional Area Plans
 Marketing plan- written document or
blueprint for implementing and
controlling an organization’s
marketing activities
 Production plan- a written document
that states the quantity of output a
company must produce
 Financial plan- summarizes the
current financial situation of the firm
 Human resources management plan-
indicates the human resource needs
of a company detailed in terms of
quantity and quality
2. Plans with Time Horizon
 Short-range plans- plans intended to
cover a period of less than one year
 Long-range plans- plans covering a
time span of more than one year
3. Plans according to Frequency of Use
 Standing plans- plans that are used
again and again
 Policies
 Procedures
 Rules
 Single-Use Plans- unique and are
unlikely to be repeated
 Budgets
 Programs
 Projects
PARTS OF THE VARIOUS FUNCTIONAL
AREA PLANS
The Contents of the marketing Plan
(by William Cohen)
1. Executive Summary- presents the overall
view of the marketing project
2. Table of Contents
3. Situational Analysis & Target Market
4. Marketing Objectives and Goals
5. Marketing Strategies
6. Marketing Tactics
7. Schedules and Budgets
8. Financial Data and Control
The Contents of the Production Plan
1. Amount of capacity the company must
have
2. How many employees are required
3. How much material must be purchased
The Contents of the Financial Plan
1. Analysis of the firm’s current financial
condition
2. Sale forecast
3. Capital budget
4. Cash budget
5. Set of pro forma
6. External financing plan
Contents of the Human Resources Plan
1. Personnel requirements
2. Plans for recruitment and selection
3. Training plan
4. Retirement plan
PARTS OF THE STRATEGIC PLAN
1. Company or corporate mission
2. Objectives or goals
3. Strategies
MAKING PLAN EFFECTIVE
1. Recognize the planning barriers
The planning barriers (Plunkett & Attner):
Manager’s inability to plan
Improper planning process
Lack of commitment
Improper information
Focusing on the present at the
expense of the future
Too much reliance on the planning
department
2. Use of aids to planning
Gather as much as information as
possible
Develop multiple sources of
information
Chapter 4: Organizing Technical Activities
ORGANIZING TECHNICAL ACTIVITIES
Organizing Defined
 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 structure.
THE PURPOSE OF THE STRUCTURE
 Defines the relationship between
tasks and authority
 Defines formal reporting
relationships, the number of levels in
the hierarchy of the organization
 Defines the groupings of individuals
into departments and departments to
organization
 Defines the system to effect
coordination of effort in both vertical
and horizontal directions.
When structuring an organization, the engineer
manager must be concerned with the following:
Division of labor- the scope of work and
how it is combined in a job
Delegation of authority- assigning various
degrees of decision-making authority to
subordinate
Departmentation- the grouping of related
jobs
Span of control- the number of people who
report directly to a given manager
Coordination- the linking of activities in the
organization that serves to achieve a
common goal
FORMAL ORGANIZATION
- “The structure that details lines of
responsibilities, authority, and position”
- Described by management through:
a.) Organization Chart- a diagram of the
organization’s official positions and
formal lines of authority
b.) Organizational Manual- written
descriptions of authority
relationships, details the functions of
major organizational units, and job
procedures
c.) Policy Manual- describe personnel’s
activities and company policies.
INFORMAL GROUPS
- Members of an organization
spontaneously form a group with
 friendship as a principal reason for
belonging.
TYPES OF ORGANIZATIONAL STRUCTURES
Organizations are classified into three:
1. Functional organization- everyone is
engaged in one functional activity
2. Product or Market Organization- brings
together all those involved with a certain
type of product or customer
3. Matrix organization- each employee reports
to both a functional or division manager and
to a project or group manager
Functional Organization
ADVANTAGES
 Permits economies of scale and efficient
resource use
 Decision-making is centralized
 Excellent communication and coordination
among employees within each department
 Provides in depth skill specialization and
development
DISADVANTAGES
 Communication and coordination between
departments are often poor
 Decisions are often delayed
 Produce routine, nonmotivating employee
task
 Difficult to identify which section is
responsible for a certain problem
Product or Market Organization
ADVANTAGES
 Flexible and responsive to change
 Provides a high concern for customer’s
needs
 Excellent coordination across functional
departments
 Easy pinpointing of responsibility
DISADVANTAGES
 High possibility of duplication of resources
 Less technical depth and specialization
 Poor coordination across divisions
 Less top management control
 Competition for corporate resources
Matrix Organization
ADVANTAGES
 More efficient use of resources
 Flexible & adaptive
 The development of both general and
functional management skills is present
 There is interdisciplinary cooperation
 There are enlarged tasks for employees
which motivate them
DISADVANTAGES
 Frustration and confusion from dual chain of
command
 High conflict between divisional and
functional interests
 Many meetings and more discussions than
action
TYPES OF AUTHORITY
1. Line Authority- a manager’s right to tell
subordinates what to do
2. Staff Authority- a staff specialist’s right to
give advice to superior
3. Functional Authority- a specialist’s right to
oversee lower-level personnel involved in
that specialty
Staff officers are classified into:
1. Personal staff- individuals assigned to a
specific manager
2. Specialized staff- individuals providing
needed staff services for the whole
organization
TWO CLASSIFICATIONS OF COMMITTEE
1. Ad hoc committee- created for a short-term
purpose
2. Standing committee- permanent committee
that deals with issues on an ongoing basis.
Chapter 5: Staffing the Engineering
Organization
Staffing- the management function that determines
human resource needs, recruits, selects, trains and
develop human resources for jobs created by
organization.
THE STAFFING PROCEDURE
1. Human resources planning- the planned
output will require a systematic deployment
of human resources at various levels
 Forecasting
 Programming
 Evaluation and control
2. Recruitment- attracting qualified persons to
apply vacant positions in the company so
that those who are best suited to serve the
company will be selected
Source of applicants:
a. The organization’s current employees
b. Newspaper advertising
c. Schools
d. Referrals from employees
3. Selection- refers to the act of choosing from
those that are available individuals most
likely to succeed on the job.
4. Induction and Orientation- employee is
provided with the necessary information
about the company and is introduced to the
immediate working environment.
5. Training & Development- learning that is
provided to improve performance on the
present job
6. Performance Appraisal- measurement of
employee’s performance
7. Employment Decisions
 Monetary rewards
 Promotion
  Transfer - To give feedback about performance
 Demotion - To motivate

8. Separation- either voluntary or involuntary 2. Upward Communication- messages from

termination of an employee
Chapter 6: Communicating
Communication- “a process of sharing information
through symbols, including words and message”
(Morris Philip Wolf)
FUNCTIONS OF COMMUNICATION
1. Information function- information through
communication may be used for decision-
making at various work levels
2. Motivation function- used as a means to
motivate employees to commit themselves
to the organization’s objectives
3. Control function
4. Emotive function- provides a means to
decrease the internal pressure affecting the
individual
persons in lower-level positions to persons
in higher positions. The techniques used in
this communication includes:
Formal grievance procedures-
provides a system for employees to
air their grievances
Employee Attitude and Opinion
Surveys- finding out what the
employees think about the company
through surveys
Suggestion systems- suggestion
from employees
Open-Door policy
Informal Gripe Sessions
Task forces
3. Horizontal Communication- messages sent
to individuals or groups from another of the
same organization level or position.

COMMUNICATION PROCESS Management Information System (MIS)

1. Develop and idea - An organized method of providing past,
2. Encode present, and projected information on
3. Transmit internal operations and external
4. Receive intelligence for use in decision-making
5. Decode
6. Accept Chapter 7: Motivating
7. Use Motivation- refers to the act of giving employees
8. Provide feedback reasons or incentives to work to achieve
organizational objectives.
FORMS OF COMMUNICATION
a. Verbal- transmitted through hearing or sight FACTORS CONTRIBUTING TO MOTIVATION
b. Non-verbal- conveying message through 1. Willingness to do a job
body languages, as well as the use of time, 2. Self-confidence
space, touch, clothing, appearance, and 3. Needs satisfaction
aesthetic elements.
THEORIES OF MOTIVATION
BARRIERS TO COMMUNICATIONS 1. Maslow’s Needs Hierarchy Theory- human
Personal barriers- arises from the communicator’s beings have five basic needs:
characteristics as a person, such as emotions, values, physiological (food, water, sleep, sex),
poor listening habits, etc. security(freedom from harm),
Physical barriers- occurs in the environment where social(friendship, belonging, love),
the communication is undertaken such as noise. esteem(status, respect, prestige), and
Semantic barriers- the message is misunderstood self-actualization(self-fulfillment)
even though it is received exactly as transmitted 2. Herzberg’s Two-Factor Theory- by
Frederick Herzberg which indicates that a
OVERCOMING BARRIERS TO satisfied employee is motivated from within
COMMUNICATION to work harder and that a dissatisfied
1. Use feedback to facilitate understanding employee is not self-motivated
2. Repeat messages 3. Expectancy Theory- assumes that an
3. Use multiple channels individual will work depending on his
4. Use simplified language perception of the probability of his
expectations to happen
TECHNIQUES FOR COMMUNICATING IN 4. Goal Setting Theory- by Edwin Locke, the
ORGANIZATIONS process of improving performance with
1. Downward communication- messages flows objectives, deadlines or quality standards
from higher levels of authority to lower
levels
- To give instruction
TECHNIQUES MOTIVATION BEHAVIORAL APPROACHES TO
1. Motivation through job design- a person will LEADERSHIP STYLES
be highly motivated to perform if he is
1. Ways Leaders Approach People- a leader
assigned a job he likes
may approach people to motivate them in
2. Through rewards
two ways, either positive or negative
3. Through employee participation
approach
4. Other Motivation techniques such as flexible
2. Ways Leaders Use Power- autocratic
work schedules, family support services, &
leaders make decisions on their own while
sabbaticals
participative leaders openly invite his
subordinate to participate in decisions
Chapter 8: Leading
3. Leaders Orientation Toward Tasks and
Leading- a management function which involves People- a leader maybe employee oriented
influencing others to engage in the work behaviors or task oriented
necessary to reach organizational goals
CONTINGENCY APPROACHES TO
HOW LEADERS INFLUENCE OTHERS
LEADERSHIP STYLE
Bases of Power 1. Fiedler’s Contingency Model- leadership is
effective when the leader’s style is
1. Legitimate power- a person who occupies a
appropriate to the situation
higher position has legitimate power over
2. Hersey and Blanchard Situational
persons in lower positions
Leadership Model- suggests that the most
2. Reward power- when a person has the important factor affecting the selection of a
ability to give rewards to anybody who
leader’s style is the development level of
follows orders or request
subordinate
3. Coercive power- a person compels another 3. Path-Goal Model of Leadership- leadership
to comply with orders through threats or
can be made effective because leaders can
punishment
influence subordinate’s perceptions of their
4. Referent power- a person can get
work goals, personal goals, and paths to goal
compliance from another because the latter
attainment.
would want to be identified with the former
4. Vroom’s Decision-Making Model-
5. Expert power- provide specialized
prescribes the proper leadership style by
information regarding their specific lines of
focusing on the appropriate degrees of
expertise delegation of decision-making authority
THE NATURE OF LEADERSHIP
Chapter 9: Controlling
Leadership- the process of influencing and Controlling- the process of ascertaining whether
supporting others to work enthusiastically toward
organizational objectives have been achieved; if not,
achieving objectives
why not; and determining what activities should
then be taken to achieve objectives better in the
Traits of Effective Leaders
future.
1. A high level of personal drive- willing to
accept responsibility
STEPS IN THE CONTROL PROCESS
2. The desire to lead
1. Establishing performance objectives and
3. Personal integrity standards- what has to be achieved must first
4. Self- confidence be determined
5. Analytical Ability
2. Measuring actual performance- this step is
6. Knowledge of the company, industry or important in the sense that when
technology
shortcomings occur, adjustments could be
7. Charisma
made
8. Creativity
3. Comparing actual performance to objectives
9. Flexibility
and standards, and
4. Taking necessary action based on the results
Leadership Skills
of the comparisons
 Technical skills- specialized knowledge
needed to perform a job
 Human skills- the ability to deal with people
 Conceptual skills- the ability to think in
abstract terms, to see how parts fit together
to form the whole
TYPES OF CONTROL Kreitner has listed some of the common symptoms
1. Feedforward control- when management
1. Unexplained decline in revenues and profits
anticipates problems and prevents their
2. Degradation of service
occurrence
3. Employee dissatisfaction
2. Concurrent control- when operations are
4. Cash shortages caused by bloated
already ongoing and activities to detect
inventories
variances are made, this control is
5. Idle facilities or personnel
undertaken
6. Disorganized operations
3. Feedback control- when information is
7. Excessive costs
gathered about a completed activity, and in
8. Evidence of waste and efficiency
order that evaluation and steps for
improvement are derived
COMPONENTS OF ORGANIZATIONAL
CONTROL SYSTEMS
1. Strategic plan
2. The long-range financial plan
3. The operating budget
4. Performance appraisals
5. Statistical reports
6. Policies and procedures
STRATEGIC CONTROL SYSTEM
1. Financial analysis- fitting certain
measurements of financial performance be
made
2. Financial Ratio Analysis- one account is
paired with another to constitute a ratio. This
may be categorized as follows:
a. Liquidity- assess the ability of a
company to meet its current obligations
b. Efficiency- show how effectively certain
assets or liabilities are being used in the
production of goods and services
c. Financial leverage- group of ratios
designed to assess the balance of
financing obtained through debt and
equity sources
d. Profitability- measure how much
operating income or net income a
company is able to generate in relation to
its assets, owner’s equity, and sales

IDENTIFYING CONTROL PROBLEMS

1. Executive reality check- the engineer
manager could, once in a while, perform the
work of one of his laborers so he will be
able to see things that he never sees inside
the confines of his air-conditioned office
2. Comprehensive internal audit- this is
undertaken to determine the efficiency and
effectivity of the activities of an
organization
3. Symptoms of Inadequate control- If a
comprehensive internal audit cannot be
availed of for some reasons, the use of a
checklist for symptoms of inadequate
control may be used