Chapter 1: Introduction

Question 1.1: Tom Taylor, the Sales Manager, was told by his boss, Carl Bauer, to take an order
from a new customer for a batch of products. Tom knew that the products involved would only
partially meet the customer’s requirements and that Carl knew that. But, Carl insisted that the
order was too valuable to lose. What should Tom do?

There are four reasons why Tom Taylor takes the order as directed:

A. It is not an accepted practice in the U.S. to disobey one’s boss. Insubordination is a valid cause for
instant discharge.

B. There is a chance that Carl Bauer knows something about this customer that Tom does not.

C. Tom’s understanding of the customer's requirements could be out-dated.

D. Should this new customer become dissatisfied at a later time, Carl Bauer will be fully responsible
for it. Tom Taylor need not be concerned about it. Furthermore, remedial action can be readily taken
at that time to make good with this customer.

Question 1.2: Nancy Bush, the plant manager, needs to decide whether to make or buy a
component for the company’s core product. She would like the advice of her production
supervisors, since they must implement his eventual decisions. However, she fears that the
supervisors will be biased towards making the component in house, as they tend to favor retaining
more work for their people. What should Nancy Bush do?

Nancy Bush should do the following:

A. Develop the evaluation criteria for the decision (e.g., cost, speed of delivery, time to market,
quality control, supplier relationship, availability of plant capacity, novelty of technology, tooling
requirements for in-house production, material procurement, etc.) and make a preliminary
assessment.

B. Talk to both supervisors separately and enlist their evaluation based on the above criteria.

C. Review the inputs of both supervisors and make a decision. For example, decide to buy now and
plan for in-house production in one year if the supplier relationship does not work out.

D. Communicate with the supervisors and explain his rationale for the final decision.

Question 1.3: The engineering Manager proposes to install an automated bar code scanner costing
$4,000. He estimates that he can save about 100 hours of labor time per month because of its
speed. He further reasons that at the wage rate of $15/hour, the benefit of using the scanner is
$1,500/month and the scanner can be paid back in 2.67 months. As the president of the company,
do you agree or disagree with the way he computes the cost/benefit ratio? Why and why not?
The answer to this question is a definite maybe. Obviously, his computation of the cost is correct.
However, his estimation of the realizable benefit is questionable. The engineering manager has so
far failed to show that 100 hours of labour saved per month can be effectively used to yield tangible
and measurable financial benefit for the company. If the saved labour time is used by workers to
drink more coffee and/or socialize more, then there is no evidence that the president will see a
benefit of $1500/month. Real benefits are possible under the following circumstances: A. If, because
of the saved labor time, the company can now reduce the labour force by half a person per year
(e.g., by way of scaled down overtime and/or switching one worker from full time to part-time), then
the saving of $18,000/year (or $1500/month) can be effectively realized. B. If the saved labour time
can be used to generate new sales orders (e.g., by way of shuffling the work around to unload a
sales person) which in turn would bring in new sales revenue, then the benefit is also real and
documentable in financial terms. In the absence of any evidence to demonstrate how the saved time
can be translated into real benefit, the claim of the engineering manager is at best a possibility with
unknown probability. To support the equipment proposal the engineering manager needs to go one
step further in defining how the benefit can indeed be realized, as his current benefit to cost analysis
is too vague.
Chapter 2: Planning

Question 2.2: Joe Engineer took a course while going to graduate school at SUNY-Buffalo. There,
he learned the importance of planning. He knows that luck plays a big role in one’s life. But he is
convinced that a proper planning will help him to have an orderly progression in his career. He
thinks that it would be cool to become an CEO at the age of 60 and retiring at 65 with a net worth
of $10 million. He wants some guidance on career planning. How can you help him?

It is advisable for Joe Engineer to follow a number of planning steps, enumerated here:

I. Set Objectives and Specify Subgoals

Before starting the planning process, we need to introduce an important assumption. In

order for Joe Engineer to be entrusted with a given management position in a publicly held major
company, he needs to have acquired and successfully demonstrated certain business management
capabilities beforehand. Obviously, this assumption may not be valid for small and medium sized
companies that are privately held.

The CEO of a major company must be familiar with a lot of functional areas, such as (1)
strategic management, (2) business management, (3) operational management, (4) project or
program management, (5) engineering management, (6) production and manufacturing, (7)
marketing management, (8) financial control, and (9) globalization. The future CEO must be able to
demonstrate sufficiency in various skills:

• Public speaking and writing

• Business analysis and planning

• Public relations

• Problem solving and conflict resolution

• Interpersonal skills

• Negotiations

• Business relations development

• Other skills

Therefore, for Joe Engineer to qualify for the CEO job, he must have garnered useful
management experience, possibly as a company president a few years back. Future capabilities are,
by and large, based on past experience. Applying such a logic in a backward-chaining manner, Joe
Engineer could readily establish a set of milestones in his plans:

Corporate president at 55

Division president at 50

Vice president at 45
Director at 40

Manager at 35

Supervisor at 30

Group leader at 25

II. Develop Action Plans

Joe should consider a forward chaining plan, which moves from the present to the future. As
examples, the following plan illustrates the qualifications that should be built up when advancing
from one stage to another:

A. Preparation (By a Certain Date)

1. Take steps to collect pertinent career development references and acquire perspectives.

2. Talk with experienced engineers to garner insights related to the costs and benefits of the
targeted objectives. The advantages and disadvantages of being a manager are well known: power,
prestige, and money versus travel, fifty- to sixty-hour workweeks, job pressure, office politics,
balance between work and home, and related factors.

3. Understand one’s own career objectives and the requirements to succeed. What are the “success
factors” involved?

4. Be aware of one’s own strengths and weaknesses, personality type, value system, and personal
requirements for happiness.

5. Confirm desirable objectives of moving into the managerial career path.

B. Group Leader

1. Get a master of engineering degree to demonstrate technical competence (by a certain date, say
1/20xx).

2. Become well versed in engineering management concepts and practices (e.g., take courses or
training).

3. Practice good interpersonal skills by doing volunteer work.

4. Network inside and outside the company (join technical societies, attend technical conferences,
publish technical papers, etc.) and know some professional people well.
C. Supervisor

1. Seek training on supervision and practice teamwork with dedication.

2. Take advanced technical courses, if needed, to help become established as a technical leader.

3. Broaden into marketing, production, and sales through business interactions.

4. Function as a gatekeeper for technology.

5. Demonstrate innovation.

6. Continue networking and become known to countless others inside and outside the company.

7. Attain recognizable technical achievements.

8. Demonstrate managerial potential.

9. Become known as a good problem solver.

D. Manager

1. Exhibit prowess in strategic planning, operation, and all other engineering management skills.

2. Showcase capabilities in interacting with sales, marketing, production, service, and customers.

3. Demonstrate success in initiating and implementing new technology projects that affect the
business success of the company.

4. Achieve organization wide recognition.

5. Form networks with important people at various levels.

E. Director

1. Become widely known in one’s own industry.

2. Participate actively in industrial trade and technical groups.

3. Demonstrate leadership in strategic planning affecting the company.

4. Be recognized for operational efficiency.

5. Make major contributions to direct the company’s businesses.

6. Master the technology-marketing interface.

7. Guide the company in utilizing emerging technology to constantly strengthen competitiveness.

8. Represent the company well to the press.

9. Have real friends in high places.

F. Vice President

Joe Engineer is advised to fill in the remainder of this plan as an exercise.

1. Budget and Commitment

A. Invest the proper amount of resources (time, money, and efforts) to ready oneself for the next
stages.

B. Make a firm commitment to carry out action steps specified in the plan.

2. Review and Update

Review the plan and make adjustments regularly to exercise proper control of this career path.
Knowing what it takes to move to the next stage, and preparing oneself in time for that big
opportunity ahead, set forth a good mantra for Joe Engineer to follow.

Question 2.3: The company has always been focused on the high-quality high-price end of the
market. Now, market intelligence indicates that some competitors are planning to enter the low-
price low-quality end of the market. What should the company do?

Obviously, the company must find ways to protect its current market share in the high-price,
high-quality niche. Without protection, this niche could become slowly eroded by the anticipated
introduction of a new low-price, low quality product by the competition. Time is of essence and the
company must act quickly. Thus, the strategic plan to protect company’s position should include:

A. Explore the option of importing a low-price and low-quality product to the market and make
inquiries about cost, performance, delivery and logistics.

B. Follow the competition closely to understand their new products and evaluate the market
reaction to them.

C. If the market exhibits signs of accepting the competition’s new products, then the company
should introduce the imported products to compete directly at a discounted price. The purpose is to
reach and understand customers in this new low-price, low-quality niche so that they may be served
better in the future. One obvious alternative is for the company to drive out the competition using
the imports, based on a “second brand” strategy.

D. If the company registers a decline of sales in the high-price and high-quality market niche, then it
should consider the development of new medium-price and medium-quality products in order to
recover some of its lost customers.
Question 2.7: There are always risks associated with the experimentation of a new manufacturing
process or with the entry into a new global market, the risks of failure. How should one decide to
proceed or not to proceed with a risky venture? What is the proper level of risks to take?

All new ventures have inherent uncertainties. In deciding to take the risks of going forward with the
venture, several questions need to be answered first: A. Should it luckily turn out to be successful,
what is the maximum pay-out (e.g., value) of the venture? B. Why is the venture deemed to be
risky? How likely are all risk factors expected to play out in reality? What contingency steps are
available to minimize the impact of these risk factors? Answers to these questions will lead to an
assessment of the probability of success for the venture. C. Should the venture fail (e.g., time delay,
reputation, company bankruptcy, loss of market share, etc.), what is the adverse impact on
company? A typical set of guidelines for avoiding taking unwarranted risks may include the
following: A. The cost of going forward with the venture must be much smaller than the expected
value of the risky venture (the probability of success multiplied by the maximum pay-out of venture).
B. The adverse impact on company must be smaller than the maximum pay-out of the venture.
Chapter 3: Organizing

Question 3.1: Which type of organizational structure is best suited for developing a new product
which requires a high level of specialization in several functions and the time to market represents
a critical factor?

Forming a concurrent development team is most suitable for this assignment. The steps to take are:
(1) Name experienced staff of major functions (e.g., marketing and sales, design engineering,
product development, customer service, and production) as members,

(2) Set objectives,

(3) Define time and budget constraints, and

(4) Declare a top priority for all supports the team might need.

Question 3.5: The company has been making most of its sales to a few large customers. The
company president wishes to broaden its customer base. To do so may require a change of
company culture, its product line strategy, its marketing/sales program, and its service
organization. How should he go about making the required changes?

The company president should take the following steps:

(1) Authorize market research to verify the existence of an enlarged customer base for the
company's products.

(2) Conduct an external benchmarking program to validate the company's marketing practice being
compatible to the best in industry.

(3) Communicate the results to all employees via a town meeting, electronic bulletin board,
company newsletter or other such means.

(4) Form a high-level team, which contains representative of all major functional groups (e.g.,
marketing, design engineering, product development, production, finance, and service) to develop a
strategy for broadening the customer base (e.g., segment size, growth rate, new product features,
competition, marketing/sales program, service organization to ensure customer satisfaction, etc.)

(5) Form a New Products division, whose primary objectives are to produce, Market, sell and service
the enlarged target customer base.

(6) Authorize resources and delegate the responsibility and authority of program implementation to
the New Products division.

(7) Review results regularly to monitor progress.

Question 3.7: As the company’s sales are coming down unexpectedly, the president asks you to
chair a task force with the objectives of developing solutions to correct the situation. Who do you
want to be on this task force? How should this problem be resolved?

(1) The preferred members on this presidential task force should be marketing/sales, design
engineering, product development, production, finance, logistics, and service. The specific
representatives from these functional groups must be experienced, recognized leaders in their
domains of expertise, known for their innovative and creative insights, and are relatively easy to
work with.

(2) The task force should first get organized. Available data are then to e reviewed. The groups
should brainstorm possible causes for the declining sales:

a. Was the product price too high in comparison to competition due to high product cost?

b. Were our sales people ineffective due to poor training, low morale, meager compensation, and/or
inadequate equipment/facilities?

c. Was our advertisement budget too low, leading to low product exposures and brand name
recognition?

d. Was there a decrease of product demand due to new substitution products recently coming into
the market from overseas?

e. Were our customers dissatisfied with the services (e.g., problem-solving, pare parts, order
processing, etc.)?

f. Others.

(3) Assign task force members to collect/acquire applicable data for verifying any identified causes
responsible for the sales decline.

(4) Once the real causes for sales decline are identified, add additional experts to the task force to
help defining solutions. Develop a list of options available to eliminate all causes of the problem.

(5) Rank order the options, document the decision criteria and report back to the company
president.

(6) Reorganize the task force to include experts on project implementation. Implement the project
plan as approved.

Question 3.9: Steve Lee, the Engineering Manager, delegates tasks as a good manager should.
However, Mark Hayes, the Engineering Director, has the bad habit of calling up Steve
unexpectedly to get detailed reports on various on-going activities in Steve’s department. Steve
does not want to hold daily staff meetings in order to satisfy Mark’s information needs, because
Steve is quite certain that requiring his professional staff to make daily reports will definitely
upset them, as all of them are known to prefer independence. What should Steve do?
(1) Since the Director's need of knowing details may be created by the need of his boss, the VP. It is
not a good idea for Steve to question Mark's wisdom of asking so many detailed questions. Read all
progress reports, make notes at staff meeting, and tabulate the major milestones and results of all
projects. Have this table on the desk, so that some details can be extracted from it, when the
Director calls.

(2) If Steve can not answer specific questions, offer to call in the professional staff involved and have
a verbal report made in Steve's presence. Make notes on additional details so reported.

(3) Resist an increase in review frequency, as Steve should protect his staff from diverting too much
time to communications.

Question 3.4: Six months ago, the company hired an engineer for his expertise in hydraulic drives,
based on a product development plan with a forecast for needing this expertise. Market
conditions have suddenly changed in favor of sophisticated electric drives. The engineer involved
turns out to be very good in his area of specialization. But it is difficult to retrain him for other
assignments in the company. Should the company discharge this engineer?

Change in business conditions is a valid reason for force reduction. Yes, the engineer should be
discharged with severance pay. The company may want to retain the service of an outplacement
consulting firm to assist the engineer in finding a new job. Furthermore, the company may offer a
very positive reference letter to support the engineer in his search for new jobs.

Question 3.6: The company is considering a plan to upgrade its current product line. The cost of
product upgrade is high. There is a small company which has developed the technology required
for this product upgrade. What strategy should the company follow, if it wants to continue selling
into its current market with the new upgraded product?

Acquire the small company to shorten the time to market, thus more readily to preserve its
marketing position in the marketplace. Integrate its technology into the company, modify
production line to accommodate the upgrade, and utilize the current marketing, sales and service
staff to manage customer relations. In this way, the company can take advantage of its established
brand name and expand the current customer base.

Question 3.8: A loyal and high volume customer has warned the company’s Marketing department
that Project X is extremely critical to their need and that if this project is late, they may be forced
to buy elsewhere. The project manager knows that the best estimates available to date from
various in-house groups indicate that at the current rate of progress the Project X will be late by
about 6 months. What should the project manager do?

Meeting customer's requirements must always be the primary goal of every company, even it may
mean a loss of profitability sometimes. Re-organize the project to utilize external resources (e.g.,
drafting, model making, testing, design of specific parts, quality control, etc.) for supplementing in-
house capabilities in order to shorten the time to market. Estimate the additional costs involved and
get an authorization. Assure Marketing that Project X will be delivered on time.Understand the real
causes of project delays (e.g., poor initialestimates, poor execution, special unanticipated events,
delivery problems of vendor-supplied parts, short of skilled staff due to resignation, etc.), develop
the pertinent contingency measures, and document these findings for future use.

Question 3.11: In an organization offering dual-ladder career progression system, technically

trained people may opt to progress along a technical ladder, instead of the traditional managerial
ladder. How does it work?

Question 3.13: Once the functional manager and project manager agree on a project schedule,
who is responsible for getting the work performed? Who is accountable for getting the work
performed? Why the difference, if any?

Responsibility and accountability are two different management concepts. In a matrix organization,
the project manager delegates jobs to the functional manager, who, in turn, assigns specific
activities to individual employees in his or her functional group. The functional manager remains
responsible for getting the work performed, whereas the project manager is accountable for the
results of the work that has been delegated to and done by the functional manager (or his or her
people). The project manager is accountable for achieving specific project objectives. He or she
defines the pertinent jobs to be accomplished. If the jobs are defined improperly, causing the
objectives to be impossible to attain, the project managers are accountable for such mistakes. The
functional manager, by contrast, is responsible only for supplying the right people with the proper
skills and dedication to accomplish the stated activities. The functional manager is responsible for
accomplishing the agreed-on tasks in an efficient and professional manner.
Question 3.14: Because of the individuality of people, there always exits differing views of what
project management is all about. Below are lists of possible perspectives and a selected group of
people. Match the people with their views of project management.

Question 3.15: The organization chart of Company X reveals that different number of employees
reports to its five departments shown. How would you explain the difference?

Question 3.16: Some people feel that working as a team, instead of allowing experts to produce
more creative outcomes, actually resulted in watered-down compromises and bland solutions.
They view teamwork as a series of exercises in “sharing ignorance.” Do you agree or disagree and
why? What can be done to improve the technical qualities of the team outcomes?

The concern about the watered-downed outputs of teams is real. Team members of different
background and expertise may indeed have different opinions, which often force the team members
to compromise. It is quite true that sometimes the views of the domain experts on the team are not
shared and accepted by others on the team, who do not and will not want to understand. One
obvious way to ensure the technical quality of the team results is to select people to lead who are
technically qualified and able to render technical judgment. Another way is to bring in an impartial
outside consultant to comment and advise on the relative technical merits of the options under
consideration. Team consensus is good to have, because it allows the team members to jointly own
the team outcome. This ownership represents a strong motivation factor to team members who are
then inspired to actively implement the team outcome. A technically superior team outcome adds
little value if it is not implemented properly. It is certainly true that a lousy team outcome remains
lousy, even if implemented well. Teams need both technologically superior outcome and proper
implementation capability.
Chapter 4:

Question 4.3: You have been socially pretty active while in college. You know a few people over
the years. Among many friends, the following three stand out. Liza majors in literature, is very
sociable and communicative, and has an average appearance. She does not hate homemaking.
Julie, on the other hand, majors in computer engineering, has a very sharp intellect, and is rather
strong willed. She is reasonably sociable and has a passable appearance. Homemaking is not her
cup of tea. Debbie is the high school sweetheart, very adaptable and lovely, easy going,
comfortable to be with, and has a superb appearance. Her social skills are so so. She likes
homemaking which is a tradition of her family and she does it well. Your grandfather is getting old
and your mother has been bugging you to make up your mind to get married. Time is running out
and you need to make a choice. How would you go about deciding for one of these three
candidates as a prospective mate.

Question: The company decided to move its engineering center to another location, since it was
running out of space. The new location was to be modern and had been planned as a showpiece
for the company. Management felt certain that the employees would welcome the move.
Negotiations were started with several local governmental authorities for suitable
accommodations.

To keep the workforce fully informed, it was agreed that the employees would be told
that a move was to be made, but that as yet no site had been chosen.

This communication let to wide speculations among the engineers as to the new

site, and various rumors circulated. Some engineers with families decided to look for alternative
employment elsewhere, fearing that the new location would not be within commuting distance.
Morale fell and productivity suffered.
 Negotiations took longer than anticipated, and no suitable location had been found after
six months. By then, morale was so low that the company decided to abandon its relocation plan
altogether. To overcome the space problem, the company split the engineering group by putting a
smaller team into another factory site nearby.

What went wrong? How would you have handled this case differently?

“To communicate or not to communicate”—that was the question. A well-intended but premature
relocation announcement induced anxiety in the minds of affected engineers. A lack of progress in
site negotiations compounded these anxieties, causing low morale and decreased productivity,
leading to an eventual abandonment of the plan. It would have been better for the company
management to keep the plan secret initially, negotiate for and decide on a specific site, and then
have the company president announce the relocation plan in a town meeting. The announcement
should have included the following:

• The location of the new site, with emphasis on the advantages in transportation, health care,
weather, and historical, cultural, and recreational attractions.

• A request for the support of all engineers in making the relocation as smooth as possible. The
purpose of the relocation is to provide a better facility for everyone. The company is investing x
million dollars to support this move, which will allow for further expansion in the near future.

• The date by which relocation is to be completed.

• A delineation of the company’s plans to fund all relocation costs and offer assistance in selling and
buying homes, if the relocation is more than 100 miles away. The company will also assist the
affected spouses to find jobs at the new site.

• The description of a human resources desk that will be set up to answer specific questions.

Question: The company's product promised to a major customer is running late and there was
intense pressure on the production team to deliver the product. The Direction of Production was
eventually told by the company President to “deliver or else.” The Director therefore decided to
ship the product, even though it had not gone gone through all its testing procedures. Members
on the product team were angry by the uncertainty in the functionality and reliability of the
shipped product. The Director however insisted: “We will just have to take that chance.” As the
Director of Production, how would you act differently?

The Director should do the following:

(1) Schedule overtime to conduct as much testing as possible before product shipment.

(2) Ship the product on time.

(3) Conduct a risk analysis to identify conceivable failure modes and their respective remedial
solutions, based on the best understanding of the production team at this time.
(4) Get the team prepared to respond to customer's service needs.

(5) Review causes for product delays and initiate a program to speed up the product development
process.