Management is the process of achieving organizational goals by engaging in the four

major functions of planning & decision-making, organizing & staffing, directing/leading, and
controlling.

- Identifying a “force”/group of people whose job is to direct the effort and activities of
other people towards a common organizational objective.

- The performance of conceiving and achieving desired results by means of group effort
consisting of utilizing resources, that will determine the success and failure of an organization.

Engineering Management is the process of designing and maintaining an environment

goals/objectives.

- Activity combining technical knowledge with the ability to organized and

coordinate woker power, materials, machinery, and money.

- Management applies to any kind of organization.

- It applies to all managers at all organizational levels.

- Managing is concerned with productivity, which implies effectiveness and efficiency.

The Engineer in Various Types of Organization

In the viewpoint of Engineer, the organizations can be classified based on engineering

jobs performed;

Level One – Those with minimal engineering jobs like retailing firms. Businesses that sell goods
and services to consumers fall under the umbrella of retailing. Engineering plays a vital role in
the retail business, an important area of work is in the retail outlets themselves. As an engineer
you could also be involved in delivering aspect of a retailer’s corporate environmental policy.
INTRODUCTION:

Engineering is the natural sciences, gained develop ways to utilize, of mankind.

profession in which a knowledge of the mathematical and by study, experience, and practice,
is applied with judgment, to economically, the materials and forces of nature for the benefit

Engineers work in Retail Industry

1. Manufacturing, Production and Distribution. Participate in design reviews to ensure

manufacturability of the product. Determine methods and procedures for production
distribution.

2. Quality Measurement and Improvement. Work with design and product quality is
maintained during the design and production phases.
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 3. Project Management. Develop the detail breakdown structure of complex activities
and form them into an integrated plan. Conduct facility planning and facility layout
development of new and revised production plants and office building.

Level Two - Moderate degree of engineering jobs like transportation companies. The
transportation industry encompasses all those businesses that move people or goods, by land,
sea, or air, from one point to another. The transportation sector is made up of airlines, railroads
and trucking companies. As a transport or traffic planner, you will help manage the growth of
road, air and rail transport. Much of your work will involve looking at the impact of transport
issue on the public.

Engineers in Transportation Industry

Work Measurement and Methods Analysis
Offers tools that aid management in the control and execution of transportation
processes and provide a mechanism by which the performance of the system
can be measures.
It is often used to develop comprehensive work scheduling an vehicle routing
systems aimed at reducing costs and meeting all service commitments.
Measurement Systems
This develops effective transportation performance measures, including
customer satisfaction, cost, and plan accuracy.

Level Three – those with a high degree of engineering jobs like construction firms. This industry
is mainly an urban based one which is concerned with preparation as well as construction of
real estate properties. The repairing of any existing building or making certain alterations in the
same also comes under Construction Industry. Construction engineers are key members of
building projects, who must have strong analytical skills and be good at working with a large
team.

Engineer’s work in Construction Industry

Supply Chain Management
Manage suppliers’ relationships
Managing and report on company Supplier Cost/Performance
Indices’ of the management

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 Module 1: DECISION MAKING

Learning objectives:

After reading the module and reviewing the materials presented the learner will be able to:
1. Explain decision-making as a management responsibility.
2. Understand and ability to use the decision-making process.
3. Identify approaches in solving problems.
4. An appreciation for the various situation in which decisions are made.

Learning Content:

Decision-making may be defined as “the process of identifying and choosing alternative

courses of action in a manner appropriate to the demands of the situation. The definition
indicates that the engineering manager must adapt a certain procedure designed to determine
the best option available to solve certain problems.

Decisions are made at various management levels (i.e. top, middle, and lower levels)
and at various management functions (i.e. planning, organizing, directing or leading, and
controlling). Decision-making, according to Nickels and others, “is the heart of all the
management functions.”

The Decision-Making Process

Rational decision-making according to David H. Holt, is a process involving the following steps:

1. Diagnose problem – What is the problem? According to an expert, “identification of the

problem is tantamount to having the problem half-solved.” A problem exists when there is a
difference between an actual situation and a desired situation. For instance, the
management of a construction company entered into a contract with another party for the
construction of 25-storey building on a certain site. The actual situation of the firm is that it
has not yet constructed the building. In this case, the actual situation is different from the
desired situation. The company, therefore, has a problem and that is construction of the 25-
storey building.
2. Analyze the environment – The environment where the organization is situated, plays a very
significant role in the success or failure of such organization. It is therefore, very important
that an analysis of the environment be undertaken.

The objective environment analysis is the identification of constraints, which may be spelled
out as either internal or external limitation such as follows:

A. Internal limitations
a. Limited funds available for the purchase of equipment.
b. Limited training on the part of employees.
c. Designed facilities

B. External limitations
a. Patents are controlled by other organizations.

5
 b. A very limited market for the company’s product and services
c. Strict enforcement of local of zoning regulations. When decisions are to be made,
external and internal limitations must be considered.

The components of the environment consist of two major concerns:

1. Internal – The internal environment refers to organizational activities within a firm that
surrounds decision-making.
2. External – The external environment refers to valuables that are outside the
organization and typically not within the short-run control of top management.

Develop Viable Alternatives

Oftentimes, problems may be solved by any of the solutions offered. The best among
alternative solutions must be considered by management. This is made possible by using a
procedure with the following steps:

1. Prepare a list of alternative solutions.

2. Determine the viability of each solution.
3. Revise the list by striking out those which are not viable.

Evaluate Alternatives

After determining the viability of the alternatives and a revised list has been made, an
evaluation of the remaining alternatives is necessary. This is important because the rest step
involves making a choice. Prepare evaluation makes choosing the right solution less difficult.

How the alternatives will be evaluated will depend on the nature of the problem, the
objectives of the firm, and the nature of alternatives presented. Should suggests that “each
alternative must be analyzed and evaluated in terms of its value, cost, and risk characteristics.

Make a choice

After the alternatives have been evaluated, the decision-maker must now be ready to
make a choice. This is the point where he must be convinced that all the previous steps were
correctly undertaken.

Choice-making refers to the process of selecting among alternatives representing

potential solutions to a problem. At this point, Webber advise that “…particular effort should be
made to identify all significant consequences of each choice.”

Implement Decision

After a decision has been made, implementation follows. Implementation refers to

carrying out the decision so that objectives sought will be achieved. To make implementation

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effective, a plan must be devised. At this stage, the resources must be made available so that
the decision may be properly implemented.

Evaluate and Adapt Decision Results

In implementing the decision, the results expected may or may not happen. It is,
therefore, important for the manager to use control and feedback mechanisms to ensure results
and to provide information for future decisions.

Feedback refers to the process which requires checking at each stage of the process to
assure that the alternatives generated, the criteria used in evaluation, and the solution selected
for implementation are in keeping with the goals and objectives originally specified.

Control refers to actions made to ensure that activities performed match the desired
activities or goals, that have been set.

In this last stage of the decision-making process, the engineer manager will find out
whether or not the desired result is achieved. If the desired result is achieved, one may assume
that the decision made was good.

Approaches in Solving Problems

In decision-making, the engineer manager is faced with problems which may either be
simple or complex. To provide him with some guide, he must be familiar with the following
approaches:

1. Qualitative evaluation. This term refers to evaluation of alternatives using intuition and
subjective judgement. Stevenson states that managers tend to use the qualitative approach
when.
a. The problem is fairly simple.
b. The problem is familiar
c. The costs involved are not great.
d. Immediate decisions are needed.

2. Quantitative evaluation. This term refers to the evaluation of alternatives using any
technique in a group classified as rational and analytical.

Quantitative Models for Decision-Making

The types of quantitative techniques which may be useful in decision-making are as follows:

1. Inventory Models consist of several types all designed to help the engineer manager
make decisions regarding inventory. They are as follows:

a. Economic order quantity model – this one is used to calculate the number of items
that should be ordered at one time to minimize the total yearly cost of placing orders
and carrying the items in inventory.
b. Production order quantity model – this is an economic order quantity technique
applied to protection orders.

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 c. Back order inventory model – this is an inventory model used for planned shortages.
d. Quantity discount model – an inventory model used to minimize the total cost when
quantity discounts are offered by suppliers.

2. Queueing Theory is one that describe how to determine the number of service units that
will minimize both customer waiting time and cost of service. The queueing theory is
applicable to companies where waiting lines are a common situation. Examples are cars
waiting for service at a car service center, ships and barges waiting at the harbor for
loading and unloading by dock-workers, programs to be run in a computer system that
processes jobs, etc.

3. Network Models. There are models where large complex tasks are broken into smaller
segments that can be managed independently. The two most prominent network models
are:

a. The Program Evaluation Review Technique (PERT) – a technique which enables

engineer managers to schedule, monitor, and control large and complex projects by
employing three time estimates for each activity.
b. The Critical Path Method (CPM) – this is a network technique using only one time
factor per activity that enables engineer managers to schedule, monitor, and control
large and complex projects.

4. Forecasting. There are instances when engineer managers make decisions that will
have implications in the future. A manufacturing firm, for example, must put up a
capacity which is sufficient to produce the demand requirements of customers within the
next 12 months. As such, manpower and facilities must be procured before the start of
operations. To make decisions on capacity more effective, the engineer manager must
be provided with data on demand requirements for the next 12 months. This type of
information may be derived through forecasting. Forecasting may be defined as “the
collection of past and current information to make predictions about the future.”

5. Regression Analysis. The regression model is a forecasting method that examines the
association between two or more variables. It uses data from previous periods to predict
future events. Regression analysis may be simple or multiple depending on the number
of independent variables present. When one independent variable is involved, it is called
simple regression; when two or more independent variables are involved, it is called
multiple regression.

6. Simulation is a model constructed to represent reality, on which conclusions about real-

life problems can be used. It is a highly sophisticated tool by means of which the
decision maker develops a mathematical model of the system under consideration.
Simulation does not guarantee an optimum solution, but I can evaluate the alternatives
fed into the process by the decision marker.

7. Linear programming is a quantitative technique that is used to produce an optimum

solution within the bounds is imposed by constraints upon the decision. Linear
programming is very useful as a decision-making tool when supply and demand
limitations at plants, warehouse, or market areas are constraints upon the system.

8. Sampling theory is a quantitative technique where samples of populations are

statistically determined to be used for a number of processes, such as quality control

8
 and marketing research. When data gathering is expensive, sampling provides an
alternative. Sampling in effect, saves time and money.

9. Statistical Decision theory refers to the “rational way to conceptualize, analyze, and
solve problems in situations in involving limited, or partial information about the decision
environment. When the decision-maker is able to assign probabilities to the various
events, the use of probabilistic decision rule, called the Bayes criterion, becomes
possible. The Bayes criterion selects the decision alternative having the maximum
expected payoff, or the minimum expected loss if he is working with a loss table. The
purpose of Bayesian analysis is to revise and update the initial assessments of the event
probabilities generated by the alternative solutions. This is achieved by the use of
additional information.

Assignment no. 1 (DECISION-MAKING)

1. When a problem becomes apparent and the engineer manager chooses to ignore it, is
he making a decision? Explain your answers.

2. What are components of the environment from the point of view of the decision-maker?
What do they consist of?

3. Why is it important for those who will be involved in the implementation to understand
and accept the solution to the problem?

4. What are the approaches in solving-problem?

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 Module 2: PLANNING AND ORGANIZING

A. PLANNING

Learning Objectives:
a. To provide sense of direction.
b. Identify planning at various management levels.
c. Determine the planning process.
d. Determine types of plans and how to make planning effective.

Learning Content:

If managing an organization is to be pursued vigorously, planning will constitute the most

important activity. Managers who plan are afforded with the opportunity to carefully analyze
situations which directly contribute to effective decision-making.

The Nature of Planning

There are many instances when mangers are overwhelmed by various activities which at
times becloud his judgment. This must be expected since anybody who is confronted by several
situations happening simultaneously will lose sight of the more important concerns. To minimize
mistakes in decision-making, planning is undertaken.

A plan, which is the output of planning, provides a methodical way of achieving desired
results. In the implementation of activities, the plan serves as a useful guide.

Planning Defined

Planning, according to Nickels and others, refers to “the management function that
involves anticipating future trends and determining the best strategies and tactics to achieve
organizational objectives.” This definition is useful because it relates the future to what could be
decided now.

Aldag and Stearns, on the other hand, define planning as “the selection and sequential
ordering of tasks required to achieve an organizational goal.” This definition centers on the
activity required to accomplish the goals.

The definition of Cole and Hamilton provides a better guide on how to effectively perform
this vital activity. Planning, according to them is “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.

Planning at Various Management

Since engineer managers could be occupying positions in any of the various

management levels, it will be useful for them to know some aspect of planning undertaken at
the different management levels.

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 Planning activities undertaken at various levels are as follows:

1. Top management level – strategic planning

2. Middle management level – intermediate planning
3. Lower management level – operational planning

Strategic Planning

The term strategic planning refers to the process of determining the major goals of the
organization and the policies and strategies for obtaining and using resources to achieve those
goals.

Intermediate Planning

Intermediate planning refers to “the process of determining the contributions that

subunits can make with allocated resources.” This type of planning is undertaken by middle
management.

Under intermediate planning, the goals of a subunit are determined and a plan is
prepared to provide a guide to the realization of the goals. The intermediate plan is designed to
support the strategic plan.

Operational Planning

The term operational ASSI refers to “the process of determining how specific tasks can
best be accomplished on time with available resources.” This type of planning is a responsibility
of lower management. It must be performed in support of the strategic plan and the intermediate

plan.
The Planning Process

The process of planning consists of various steps depending on the management level
that performs the planning task. Generally, however, planning involves the following:

1. Setting Organizational, Divisional, or Unit Goals

The first task of the engineer manager is to provide sense of direction to his firm (if he is
the chief executive), to his division (if he heads ad vision), or to his unit (if he is a supervisor).
Goals may be defined as the “precise statement of results sought, quantified in time and
magnitude where possible”.

2. Developing Strategies or Tactics to Reach Goals

After determining the goals, the next task is to devise some means to realize them. The
ways to realize the goals are called strategies and these will be the concern of top
management. The middle and lower management will adapt their own tactics to implement their
plans.

A strategy may be defined as “a course of action aimed at ensuring that the organization
will achieve its objectives.”

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 A tactic is a short-term action taken by management to adjust to negative internal or
external influences. They are formulated and implemented in support of the firm’s strategies/
The decision about short- term goals and the courses of action are indicated in the tactical plan.

3. Determining Resources Needed

When particular sets of strategies or tactics have been devised, the engineer manager
will, then, determine the human and nonhuman resources required by such strategies or tactics.
Even if the resources requirements are currently available, the must be specified.

To satisfy strategic requirements, a general statement of needed resources will suffice.

The specific requirements will be determined by the different units of the company.

4. Setting Standards

The standards for measuring performance may be set at the planning stage. When
actual performance does not match with the planned performance, corrections may be made or
reinforcements given.

A standard may be defined as “a quantitative or qualitative measuring device designed

to help monitor the performances of people, capital goods, or processes.”

Types of Plans

Plans are of different types, they may be classified in terms of functional areas, time
horizon, and frequency of use.

A. Functional Area Plans

Plans may be prepared according to the needs of the different functional areas.
Among the types of functional area plans are the following:

1. Marketing plan – this is the written document or blueprint for implementing and
controlling an organization’s marketing activities related to a particular marketing
strategy.
2. Production plan – this is a written document that states the quantity of output a
company must produce in broad terms and by product family.
3. Financial plan – It is a document that summarizes the current financial situation of
the firm, analyzes financial needs, and recommends a direction for financial activities
4. Human resource management plan – it is a document that indicates the human
resource needs of a company detailed in terms of quantity and quality and based on
the requirements of the company’s strategic plan.

B. Plans with Time Horizon

Plans with time horizon consist of the following:

1. Short-range plans – these are plans intended to cover a periodof less than one year.
First line supervisors are mostly concerned with these plans.

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 2. Long-range plans – these are plans covering a time span of more than one year.
These are mostly undertaken by middle top management.

C. Plans According to Frequency of Use

According to frequency of use, plans may be classified as:

1. Standing Plans. These are plans that are used again and again, and they focus on
managerial situations that recur repeatedly.

Standing plans may be further classified as follows:

a. Policies – they are broad guidelines to aid managers at every level in making
decisions about recurring situations or function.

b. Procedures – they are plans that describe the exact series of actions to be
taken in a given situation.

c. Rules – they are statements that either require or forbit a certain action.

2. Single-Use Plans. These plans are specifically developed to implement courses of

action that are relatively unique and are unlikely to be repeated.

Single-use plans may be further classified as follows:

a. A budget, according to Weston and Brigham, is “a plan which sets forth the
projected expenditure for a certain activity and explains where the required
funds will come from.”

b. A program used a single-use plan designed to coordinate a large set of

activities.

c. A project is a single-use plan that is usually more limited in scope than a

program and is sometimes prepared to support a program.

Parts of the Various Functional Area Plans

Contents of the Marketing Plan

The structure and content of marketing plans vary depending on the nature of the
organizations adapting them. William Cohen maintains that the following must be included in the
marketing plan.

1. The Executive Summary – which presents an overall view of the marking project and its
potential.
2. Table of Contents
3. Situational Analysis and Target Market
4. Marketing Objectives and Goals
5. Marketing Strategies

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 6. Marketing tactics
7. Schedule and Budgets
8. Financial Data and Control

The Contents of the Production Plan

The production plan must contain the following.

1. The 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

The components of the financial plan are as follows.

1. An analysis of the firm’s current financial condition as indicated by an analysis of the

most recent statements
2. A sales forecast
3. The capital budget
4. The cash budget
5. A set of pro forma (or projected) financial statements
6. The external financing plan

Contents of the Human Resources Plan

The human resources plan must contain the following:

1. Personnel requirements of the company

2. Plans for recruitment and selection
3. Training plan
4. Retirement plan

Parts of the Strategic Plan

The strategic plan must contain the following:

1. Company or corporate mission

2. Objectives or goals
3. Strategies

Company of corporate mission refers to the “strategic statement that identifies why an
organization exists, its philosophy of management, and its purpose as distinguished from other
similar organizations in term of products, services, and markets.”

Making Planning Effective

Planning is done so that some desired results may be achieved. At times, however,
failure in planning occurs.

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 Planning may be made successful if the following are observed:

1. Recognize the planning barriers

2. Use of aids to planning

The planning barriers, according to Plunkett and Attner, are as follows:

1. Manager’s inability to plan

2. Improper planning process
3. Lack of commitment to the planning process
4. Improper information
5. Focusing on the present at the expense of the future
6. Too much reliance on the planning department
7. Concentrating on only the controllable variables

Among the aids to planning that may be used are:

1. Gather as much information as possible

2. Develop multiple sources of information
3. Involve others in the planning process

Assignment No. 2 (A. Planning)

1. What planning activities are undertaken at various management levels?

2. What are the steps in the planning process?

3. What is production plan? What are its components?

4. What are the barriers to planning?

B. ORGANIZING
Learning objectives:

1. Helps to achieve organizational goal.

2. To perform managerial function.
3. Facilitate growth and diversification.
4. Determine types of authority and the purpose of committees.
5. Humane treatment of employees.
6. Optimum use of resources.

Learning Content:

The engineer manager needs to acquire various skills in management, including those
for organizing technical activities. In this highly competitive environment, the unskilled manager
will not be able to bring his unit, or his company, as the case may be, to success.

15
 The value of a superior organizational set-up has been proven dramatically during the
Second World War when a smaller American naval force confronted the formidable Japanese
navy at Midway. Military historians indicated that the Americans emerged victorious because of
the superior organizational skills of their leaders.

Reasons for Organizing

Organizing is undertaken to facilitate the implementation of plans. In effective organizing,

steps are undertaken to breakdown the total job into more manageable man-size jobs. Doing
these will make it possible to assign particular tasks to particular persons. In turn, these will help
facilitate the assignment of authority, responsibility, and accountability for certain functions and
tasks.

Organizing Defined

Organizing is 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 the structure.

The result of the organizing process is the structure.

Purpose of the Structure

The structure serves some very useful purposes. They are the following:

1. It defines the relationships 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 in to
organization.
4. It defines the system to effect coordination of effort in both vertical (authority) and
horizontal (tasks) directions.

When structuring an organization, the engineer manger must be concerned with the
following:

1. Division of labor – determining the scope of work and how it is combined in a job.
2. Delegation of authority – the process of assigning various degrees of 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 objective.

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Formal Organization

After a plan is adapted, management will proceed to form an organization to carry out
the activities indicated in the plan.

The formal organization is “the structure that details lines of responsibilities, authority,
and position.” What is depicted in the organization char is the formal organization.

The formal structure is described by management through:

1. Organizational chart
2. Organizational manual and
3. Policy manuals.

The organization chat is a diagram of the organization’s official positions and formal lines
of authority.

The organizational manual provides written descriptions of authority relationships, details

the functions of major organizational units, and describe job procedures.

The policy manual describes personnel activities and company policies.

Informal Groups

Formal organizations require the formation of formal groups which will be assigned to
perform specific tasks aimed at achieving organizational objectives. The formal group is a part
of the organization structure.

Informal groups are often times very useful in the accomplishment of major tasks,
especially if these tasks conform with the expectations of the members of the informal group.

Types of Organizational Structure

Organization may be classified in to three types. They are the following:

1. Functional Organization – this is a form of departmentalization in which everyone

engaged in one functional activity, such as engineering or marketing, is grouped into
one unit.

Functional organization structures are very effective in smaller firms,

especially “single business firms where key activities revolve around well-defined
skills and areas of specialization.”

Functional organizations have certain advantages. They are the following:

a. The Grouping of employees who perform some common task permit

economies of scale and efficient resource use.
b. Since the chain of command converges at the top of the organization,
decision-making is centralized, providing a unified direction from the top.

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 c. Communication and coordination among employees within each
department are excellent.
d. The structure promotes high-quality technical problem-solving.
e. The organization is provided with in depth skill specialization and
development.
f. Employees are provided with career progress within functional
departments.

The disadvantages of the functional organization are the following:

a. Communication and coordination between the departments are often poor.

b. Decisions involving more than one department pile up at the top
management level and are often delayed.
c. Work specialization and division of labor, which are stressed in a
functional organization, produce routine, non-motivating employee tasks.
d. It is difficult to identify which section or group is responsible for certain
problems.
e. There is a limited view of organizational goals by employees.
f. There is limited general management training for employees.

2. Product or market organization – this refers to the organization of a company by

decisions that brings together all those involved with a certain type of product or
customer.

The product or market organization, with its feature of operating by divisions,

is “appropriate for a large corporation with many product lines in several related
industries.”

The advantages of a product or market organization are as follows:

a. The organization is flexible and responsive to change.

b. The organization provides a higher concern for customer’ needs.
c. The organization provides excellent coordination across functional
departments.
d. There is easy pinpointing of responsibility for product problems.
e. There is emphasis on overall product and division goals.
f. The opportunity for the development of general management skills is
provided.

The disadvantages of the product or market organization are as follows:

a. There is a high possibility of duplication of resources across divisions.

b. There is less technical depth and specialization in divisions.
c. There is poor coordination across divisions.
d. There is less top management control.
e. There is competition for corporate resources.

3. Matrix organization – an organizational structure in which each employee reports to

both a functional or division manager and to a project or group manager.

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 A matrix organization, according to Thompson and Strickland, “is a structure
with two (or more) channels of command, two lines of budget authority, and two
sources of performance and reward.” Higgins declared that “the matrix structure was
designed to keep employees in a central pool and to allocate them to various
projects in the firm according to the length of time they are needed.”

The matrix organization is afforded with the following advantages:

a. There is more efficient use of resources than the divisional structure.

b. There is flexibility and adaptability to changing environment.
c. The development of both general and functional management skills area
present.
d. There is interdisciplinary cooperation and any expertise is available to all
divisions.
e. There are enlarged tasks for employees which motivate them better.

The matrix organization has some disadvantages however. They are the
following:

a. There is frustration and confusions from dual chain of command

b. There is high conflict between divisional and functional interests.
c. There are many meetings and more discussions than action.
d. There is a need for human relations training for key employees and
managers.
e. There is a tendency for power dominance by one side of the matrix.

Types of Authority

The delegation of authority is a requisite for effective organizing. It consists of three

types. They are as follows.

1. Line authority – a manager’s right to tell subordinates what to do and then they see that
they do it. Line departments perform tasks that reflect the organization’s primary goal and
mission. In a construction firm. The department that negotiates and secures contracts for
the firm is a line department. The construction division is also a line function.

2. Staff authority – a staff specialist’s right to give advice to a superior. Staff departments
include all those that provide specialized skills in support of line departments. Examples
of staff departments include those which perform strategic planning, labor relations,
research, accounting, and personnel.

Staff officers may be classified into the following:

a. Personal staff – those individuals assigned to a specific manager to provide

needed staff services.
b. Specialized staff – those individuals providing needed staff services for the whole
organization.

3. Functional authority – a specialist’s right to oversee lower level personnel involved in

that specialty, regardless of where the personnel are in the organization. Functional

19
 authority is one given to a person or a work group to make decisions related to their
expertise even if these decisions concern other departments. This authority is given to
most budget officers of organizations, as well as other officers.

The Purpose of Committees

When certain formal groups are deemed inappropriate to meet expectations, committees
are often times harnessed to achieve organizational goals. Many organizations, large or small,
makes use of committees.

A committee is a formal group of persons formed for a specific purpose. Committees are
very useful most specially to engineering and manufacturing firms. When a certain concern, like
product development, is under consideration, a committee is usually formed to provide the
necessary line-up of expertise needed to achieve certain objectives.

Committees may be classified as follows:

1. Ad hoc committee – one created for a short-term purpose and have a limited life. An
example is the committee created to manage the anniversary festivities of a certain firm.

2. Standing committee – it is a relatively permanent committee that deals with issues on an

ongoing basis. An example is the grievance committee setup to handle initially
complains from employees of the organization.

Assignment no. 2 (B. Organizing)

1. Why is it important for the engineer manger to acquire skills in organizing?

2. What must be the concern of the engineer manager when structuring the organization?
3. What are the types of organizational structures? How may they be distinguished?
4. What are committee? How may they be classified?