Engineering Management 3

Construction Engineering and Management I (University of the Philippines System)

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CE 135 – ENGINEERING MANAGEMENT

Course Description:

This course deals with the study of the field of Engineering Management, the science of handling
technical undertakings the engineering way so that decision making shall be made more rational and logical.
It is concerned with planning and organizing technical activities, staffing the engineering organization,
communicating, motivating, leading, controlling, managing production and service operations, managing the
marketing functions and managing finance functions.

FUNCTIONS OF MANAGEMENT
Management is often summarized into five basic functions: planning, organizing, staffing, directing,
and controlling. Although these basic management functions have been developed and used by managers
of businesses, they apply equally to the management of a project. The functions of management can be
considered a process where each function builds on the previous function
Managers first need to develop a plan, then organize their resources and delegate responsibilities to
employees according to the plan, then lead others to efficiently carry out the plan, and finally evaluate the
plan’s effectiveness as it is being executed and make any necessary adjustments.

Planning is the formulation of a course of action to guide a project to completion. It starts at the beginning of
a project, with the scope of work, and continues throughout the life of a project. The establishment of
milestones and consideration of possible constraints are major parts of planning. Successful project
planning is best accomplished by the participation of all parties involved in a project. There must be an
explicit operational plan to guide the entire project throughout its life.

Organizing is the arrangement of resources in a systematic manner to fit the project plan. A project must be
organized around the work to be performed. There must be a breakdown of the work to be performed into
manageable units, which can be defined and measured. The work breakdown structure of a project is a
multi-level system that consists of tasks, subtasks, and work packages.

Staffing is the selection of individuals who have the expertise to produce the work. The persons that are
assigned to the project team influence every part of a project. Most managers will readily agree that people
are the most important resource on a project. People provide the knowledge to design, coordinate, and
construct the project. The numerous problems that arise throughout the life of a project are solved by
people.

Leading/Directing is the guidance of the work required to complete a project. The people on the project
staff that provide diverse technical expertise must be developed into an effective team. Although each
person provides work in his or her area of expertise, the work that is provided by each must be collectively
directed in a common effort and in a common direction.

• Communicating

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 Communication is a vital management component to any organization. Whether the
purpose is to update employees on new policies, to prepare for a weather disaster, to ensure
safety throughout the organization or to listen to the attitudes of employees, effective
communication is an integral issue in effective management. To be successful, organizations
should have comprehensive policies and strategies for communicating with their
constituencies, employees and stakeholders as well as with the community at large.
• Motivating
Motivation in management describes ways in which managers promote productivity in
their employees. Effective managers have the ability to motivate those they work with to
behave in a specific, goal-directed way. Motivation is defined as energizing, guiding and
sustaining employee efforts.

Controlling is the establishment of a system to measure, report, and forecast deviations in the project
scope, budget, and schedule. The purpose of project control is to determine and predict deviations in a
project so corrective actions can be taken. Project control requires the continual reporting of information in a
timely manner so management can respond during the project rather than afterwards. Control is often the
most difficult function of project management.

PLANNING

Topic 1. The Nature of Planning

Managers who plan are afforded with the opportunity to carefully analyze situations which directly contribute
to effective decision-making. The engineer manager, regardless of his management level, will have to
devote some of his time to planning.
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. The plan serves a useful guide. Without
plan, some minor tasks may be afforded major attention which may, later on, hinder the accomplishment of
objectives.
Planning refers to management function that involves setting goals, establishing strategies for
achieving those goals, and developing plans to integrate and coordinate activities. It’s concerned with both
ends (what) and means (how).
Aldag and Stearns, define planning as “the selection and sequential ordering of tasks required to
achieve an organizational goal.”
According to Cole and Hamilton, planning 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 is defined as selecting the best course of action so that the desired result may be achieved.

Why Do Managers Plan?

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 Planning seems to take a lot of effort. So why should managers plan? We can give you at least four
reasons. First, planning provides direction to managers and nonmanagers alike. When employees know
what their organization or work unit is trying to accomplish and what they must contribute to reach goals,
they can coordinate their activities, cooperate with each other, and do what it takes to accomplish those
goals. Without planning, departments and individuals might work at cross-purposes and prevent the
organization from efficiently achieving its goals.
Next, planning reduces uncertainty by forcing managers to look ahead, anticipate change, consider
the impact of change, and develop appropriate responses. Although planning won’t eliminate uncertainty,
managers plan so they can respond effectively.
In addition, planning minimizes waste and redundancy. When work activities are coordinated around
plans, inefficiencies become obvious and can be corrected or eliminated.
Finally, planning establishes the goals or standards used in controlling. When managers plan, they
develop goals and plans. When they control, they see whether the plans have been carried out and the
goals met. Without planning, there would be no goals against which to measure work effort.

Goals and Plans

Planning is often called the primary management function because it establishes the basis for all the
other things managers do as they organize, lead, and control. It involves two important aspects: goals and
plans.
Goals (objectives) are desired outcomes or targets.4 They guide management decisions and form the
criterion against which work results are measured. That’s why they’re often described as the essential
elements of planning. You have to know the desired target or outcome before you can establish plans for
reaching it. Plans are documents that outline how goals are going to be met. They usually include resource
allocations, schedules, and other necessary actions to accomplish the goals. As managers plan, they
develop both goals and plans.

Topic 2. Planning at Various Management Levels

1. Top management level – strategic planning
2. Middle management level – intermediate planning
3. Lower management level – operational planning

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. The top management of
any firm is involved in this type of planning.

The output of strategic planning is the strategic plan which spells out “decision about long-range goals and
the course of action to achieve these goals.

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.

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Operational Planning – refers to “the process of determining how specific tasks can best accomplished on
time with available resources.” This type of planning is a responsibility of lower management. It supports the
strategic plan and the intermediate plan.

Topic 3. Types of Plan

The most popular ways to describe organizational plans are breadth (strategic versus operational),
time frame (short term versus long term), specificity (directional versus specific), and frequency of use
(single use versus standing). These types of plans aren’t independent. That is, strategic plans are usually
long term, directional, and single use whereas operational plans are usually short term, specific, and
standing.

Strategic plans are plans that apply to the entire organization and establish the organization’s
overall goals. Plans that encompass a particular operational area of the organization are called operational
plans. These two types of plans differ because strategic plans are broad while operational plans are narrow.
The number of years used to define short-term and long-term plans has declined considerably
because of environmental uncertainty. Long-term used to mean anything over seven years. Try to imagine
what you’re likely to be doing in seven years and you can begin to appreciate how difficult it would be for
managers to establish plans that far in the future. We define long-term plans as those with a time frame
beyond three years. Short-term plans cover one year or less. Any time period in between would be an
intermediate plan. Although these time classifications are fairly common, an organization can use any
planning time frame it wants.
Specific plans are clearly defined and leave no room for interpretation. A specific plan states its
objectives in a way that eliminates ambiguity and problems with misunderstanding. For example, a manager
who seeks to increase his or her unit’s work output by 8 percent over a given 12-month period might
establish specific procedures, budget allocations, and schedules of activities to reach that goal.

However, when uncertainty is high and managers must be flexible in order to respond to unexpected
changes, directional plans are preferable. Directional plans are flexible plans that set out general
guidelines. They provide focus but don’t lock managers into specific goals or courses of action.

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A single-use plan is a one-time plan specifically designed to meet the needs of a unique situation. In
contrast, standing plans are ongoing plans that provide guidance for activities performed repeatedly.
Standing plans include policies, rules, and procedures.

Classification of Standing plans:

1. Policies – are broad guidelines to aid managers at every level in making decisions about
recurring situation function.
2. Procedures – are plans that describe the exact series of actions to be taken in a given
situation.
3. Rules – are statements that either require or forbid a certain action.

Classification of Single-use plans:

1. Budget – according to Weston and Brigham, budget is a plan which sets forth the
projected expenditure for a certain activity and explains where the required funds will
come from.
2. Program – a plan designed to coordinate a large set of activities.
3. Project – a plan that is usually more limited in scope than a program and is sometimes
prepare to support a program.

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