CONTROLLING The importance of controlling may be illustrated

as it is applied in a typical factory. If the required

The long-term existence of many companies, most standard daily output for individual workers is 100
often, is placed in jeopardy when some aspects of their pieces, all workers who do not produce the requirement
activities go out of control. Consider the following are given sufficient time to improve; if no improvements
examples: are forthcoming, they are asked to resign. This action
1. A news report indicated that the fire which destroyed will help the company keep its overhead and other costs
the ~800 million Superferry 7 luxury ship on March at expected levels If no such control is made, the
26, 1997 was caused by illega1 connections made on company will be faced with escalating production costs,
its electrical system.' If this is true, the losses could which will place I ho viab11ity of the firm in jeopardy.
be attributed to inadequate management control. STEPS IN THE CONTROL PROCESS
2. The tragedy that happened at the Ozone Disco in
March 18, 19962 clearly manifested management's The control process consists of four steps, namely:
lack of control over the day-to-day operations of the
firm. Even the failure to detect earlier the violations 1. establishing performance objectives and standards
in the Building Code spells lack of effective 2 measuring actual performance
government control.
3. The management of a telephone company could not 3. comparing actual performance to objectives and
stop the unauthorized use of lines assigned to many standards, and ·
of its subscribers. Customers become angry when
4. taking necessary action based on the results of the
they are billed for calls they never made.
comparisons.
The examples presented constitute a very small
percentage of unwanted occurrences that happen Establishing Performance Objectives and Standards
everyday in the business world. Apart from the
destruction of lives and property, normal business In controlling, what has to be achieved must first
operations are hampered causing discontinuities in be determined. Examples of such objectives and
employment and the provision of products and services. standards are as follows:
These could not have happened if only adequate controls 1. Sales targets-which are expressed in quantity or
were instituted. monetary terms;
WHAT IS CONTROLLING? 2. Production targets - which are expressed in
Controlling refers to the "process of ascertaining quantity or quality;
whether organizational objectives have been 3. Worker attendance - which are expressed in
achieved; if not, why not; and determining what terms of rate of absences;
activities should then be taken to achieve objectives
better in the future. Controlling completes the cycle of 4. Safety record -which is expressed in number of
management functions. Objectives and goals that are set accidents for given periods;
at the planning stage are verified as to achievement or
completion at any given point in the organizing and 5. Supplies used-which are expressed in quantity or
implementing stages. When expectations are not met at monetary terms for given periods.
scheduled dates, corrective measures are usually Once objectives and standards are established. the
undertaken. measurement of performance will be facilitated.
IMPORTANCE OF CONTROLLING Standards differ among various organizations. In
construction firms, project completion dates are useful
When controlling is properly implemented, it standards. ln chemical manufacturing firms, certain
will help the organization achieve its goal in the most pollution measures form the basis for standard
efficient and effective manner possible. requirements.
Deviations, mistakes, and shortcomings happen After the performance objectives and standards are
inevitably. When they occur in the daily operations, they established, the methods for measuring performance
contribute to unnecessary expenditures which increase must be designed. Every standard established must be
the cost of producing goods and services. Proper control provided with its own method for measurement.
measures minimize the ill effects of such negative
occurrences. An effective inventory control system, for Measuring Actual Performance
instance, minimizes, if not totally eliminate& losses in There is a need to measure actual performance
inventory. so that when shortcomings occur, adjustments could be
made. The adjustments will depend on the actual Control consists of three distinct types, namely:
findings.
1. feedforward control
The measuring tools will differ from 2. concurrent control, and
organization to organization, as each have their own 3. feedback control
unique objectives. Some firm, for instance, will use
annual growth rate as standard basis, while other firms
will use some other tools like the market share approach
and position in the industry.
Comparing Actual Performance to Objectives and
Standards
Once actual performance has been determined,
this will be compared with what the organization seeks
to achieve. Actual production output, for instance, will
be compared with the target output. This may be
illustrated as follows:
A construction firm entered into a contract with
the government to construct a 100 kilometer road within
ten months. It would be, then, reasonable for
management to expect at least 10 kilometers to be Feedforward Control
constructed every month. As such, this must be verified When management anticipates problems and
every month, or if possible, every week. prevents their occurrence, the type of control measure
Taking Necessary Action undertaken is called feedforward control. This type of
control provides the assurance that the required human
The purpose of comparing actual performance with and nonhuman resources are in place before operations
the desired result is to provide management with the begin. An example is provided as follows:
opportunity to take corrective action when necessary. If
in the illustration cited above, the management of the The manager of a chemical manufacturing firm
construction firm found out that only 15 kilometer were makes sure that the best people are selected and hired to
finished after two months, then, any of the following fill jobs. Materials required in the production process are
actions may be undertaken: carefully checked to detect defects. The foregoing
control measures are designed to prevent wasting
1. hire additional personnel; valuable resources. If these measures are not undertaken,
2. use more equipment; or the likelihood that problems will occur is always present.
3. require overtime.
Concurrent Control
When operations are already ongoing and activities
to detect variances are made, concurrent control is said
to be undertaken. It is always possible that deviations
from standards will happen in the production process.
When such deviations occur, adjustments are made to
ensure compliance with requirements. Information on
the adjustments are also necessary inputs in the pre-
operation phase.
Examples of activities using concurrent control are
as follows:
The manager of a construction firm constantly
monitors the progress of the company's projects. When
construction is behind schedule, corrective measures like
the hiring of additional manpower are made.
In a firm engaged in the production and distribution
TYPES OF CONTROL of water, the chemical composition of the water procured
from various sources is checked thoroughly before they As presented in Chapter 3, the financial plan
are distributed to the consumers. recommends a direction for financial activities. If the
goal does not appear to be where the firm is beaded, the
The production manager of an electronics control mechanism should be made to work.
manufacturing firm inspects regularly the outputs
consisting of various electronics products coming out of The Operating Budget
the production line.
An operating budget indicates the expenditures,
Feedback Control revenues, or profits planned for some future period
regarding operations. The figures appearing in the
When information is gathered about a completed budget are used as standard measurements for
activity, and in order that evaluation and steps for performance.
improvement are derived, feedback control is
undertaken. Corrective actions aimed at improving Performance Appraisals
future activities are features of feedback control.
Performance appraisal measures employee
Feedback control validates objectives and standards. performance. As such, it provides employees with a
If accomplishments consist only of a percentage of guide on bow to do their jobs better in the future.
standard requirements, the standard may be too high or Performance appraisals also function as effective checks
inappropriate. on new policies and programs. For example, if a new
equipment has been acquired for the use of an employee,
An example of feedback control is the supervisor it would be useful to find out if it had a positive effect on
who discovers that continuous overtime work for factory his performance.
workers lowers the quality of output. The feedback
information obtained leads to some adjustment in the Statistical Reports
overtime schedule.
Statistical reports pertain to those that contain data
COMPONENTS OF ORGANIZATIONAL on various developments within the firm. Among the
CONTROL SYSTEMS information which may be found in a statistical report
pertains to the following:
Organizational control systems consists of the
following: 1. labor efficiency rates
2. quality control rejects
1. strategic plan 3. accounts receivable
2. the long-range financial plan 4. accounts payable
3. the operating budget 5. sales reports
4. performance appraisals 6. accident reports
5. statistical reports 7. power consumption report
6. policies and procedures

Policies and Procedures

Strategic Plans
Policies refer to "the framework within which the
A strategic plan provides the basic control objectives must be pursued." A procedure is “a plan that
mechanism for the organization. When there are describes the exact series of actions to be taken in a
indications that activities do not facilitate the given situation."
accomplishment of strategic goals, these activities are
either set aside, modified or expanded. These corrective An example of policy is as follows:
measures are made possible with the adoption of
strategic plans. "Whenever two or more activities compete for the
company's attention, the client takes priority."
The Long-Range Financial Plan
An example of a procedure is as follows: "Procedure
The planning horizon differs from company to in the purchase of equipment:
company. Most firms will be satisfied with one year.
Engineering firms, however, will require longer term 1. the concerned manager forwards a request for
financial plans. This is because of the long lead times purchase to the purchasing officer;
needed for capital projects. An example is the 2. the purchasing officer forwards the request to top
engineering firm assigned to construct the Light Rail management for approval;
Transit (LRT) within three years. All such, the three year
financial plan will be very useful.
 3. when approved, the purchasing officer makes a Financial ratios may be categorized into the following
canvass of the requested item; if disapproved, the types:
purchasing officer returns the form to the requesting
manager; 1. liquidity
2. efficiency
4. the purchasing officer negotiates with the lowest 3. financial leverage
complying bidder. 4. profitability
It is expected that policies and procedures laid down
by management will be followed. When they are Liquidity Ratios. These ratios assess the ability of a
breached once in a while, management is provided with company to meet its current obligations. The following
a way to directly inquire on the deviations. Aa such, ratios are important indicators of liquidity:
policies and procedures provide a better means of
controlling activities. 1. Current ratio-This shows the extent to which current
assets of the company can cover its current liabilities.
The formula for computing current ratio is as follows:
STRATEGIC CONTROL SYSTEMS Current ratio = current assets/current liabilities
To be able to assure the accomplishment of the strategic 2. Acid-test ratio-This is a measure of the firm's ability
objectives of the company, strategic control systems to pay off short-term obligations with the use of current
become necessary. These systems consist of the assets and without relying on the sale of inventories. The
following: formula is as follows:
1. financial analysis Acid-test ratio = current assets - inventories/current
2. financial ratio analysis liabilities

Financial Analysis Efficiency Ratios. These ratios show how effectively

The success of most organizations depends certain assets or liabilities are being used in the
heavily on its financial performance. It is just fitting that production of goods and services.
certain measurements of financial performance be made Among the more common efficiency ratios are:
so that whatever deviations from standards are found
out, corrective actions may be introduced. 1. Inventory turnover ratio - This ratio measures
the number of times an inventory is turned over (or
A review of the financial statements will reveal sold) each year. This is computed ae follows:
important details 'about the company's performance. The Inventory turnover ratio = cost of goods
balance sheet contains information about the company's sold/inventory
assets, liabilities, and capital accounts. Comparing the 2. Fixed asset turnover-This ratio is used to
current balance sheet with previous ones may reveal measure utilization of the company's investment in
important changes, which, in turn, provide clues to its fixed assets, such as its plant and equipment. The
performance. formula used is as follows:
The income statement contains information Fixed asset turnover =net sales/ net fixed assets
about the company's gross income, expenses, and profits.
When also compared with previous years' income Financial Leverage Ratios.This is a group of ratios
statements, changes in figures will help management designed to assess the balance of financing obtained
determine if it did well. through debt and equity sources. Some of the more
important leverage ratios are as follows:
Financial Ratio Analysis
1. Debt to total assets ratio- This ratio shows how
Financial ratio analysis is a more elaborate much of the firm's assets are financed by debt. It
approach used in controlling activities. Under this may be computed by using the following formula:
method, one account appearing in the financial statement Debt to total assets ratio = total debt/total assets
is paired with another to constitute a ratio. The result
will be compared with a required norm which is usually 2. Times interest earned ratio - This ratio
related to what other companies in the industry have measures the number of times that earnings before
achieved, or what the company has achieved in the past. interest and taxes cover or exceed the company's
When deviations occur, explanations are sought in interest expense. It may be computed by using the
preparation for whatever action is necessary. following formula:
 Times interest earned ratio= (profit before tax + interest
expense) / interest expense The engineer manager of a construction firm
could, once in a while, perform the work of one of his
Profitability Ratios. These ratios measure how much operating laborers. In doing so, he will be able to see things that he
income or net income a company is able to generate in never sees inside the confines of his air-conditioned
relation to its assets, owner's equity, and sales. Among office. Because the said -action exposes the engineer
the more notable profitability ratios are ae follows: manager to certain realities, the term “executive reality
check" is very appropriate.
1.Profit margin ratio - This ratio compares the net profit to
the level of sales. The formula used is as follows: Comprehensive Internal Audit
Profit margin ratio = net profit/net sales An internal audit is one undertaken to determine
the efficiency and effectivity of the activities of an
2. Return on assets ratio - This ratio shows how much organization. Among the many aspects of operations
income the company produces for every peso within the organization, a small activity that is not done
invested in assets. The formula used is as follows: right may continue to be unnoticed until it snowballs into
Return on assets ratio =net a full blown problem.
income/assets An example is the resignation of an employee
after serving the company for 15 years. After one week,
3.Return on equity ratio - This ratio measures the returns another employee with ten years of service also resigned.
on the owner's investment. It may be arrived at by Both were from the same department. If after another
using the following formula: week a third employee is resigning, a full investigation is
Return on equity ratio = net income/equity in order. Even if the source of the problem is identified,
it may already have caused considerable losses to the
IDENTIFYING CONTROL PROBLEMS organization. A comprehensive internal audit aims to
detect dysfunctions in the organization before they bring
Recognizing the need for control is one thing, actually bigger troubles to management.
Implementing it is another. When operations become
complex, the engineer manager must consider usefulSymptoms of Inadequate Control
steps in controlling Kreitner mentions three If a comprehensive internal audit cannot be
approaches: availed of for some reason, the use of a checklist for
symptoms of inadequate control may be used.
1. executive reality check
2. comprehensive internal audit Kreitner has listed some of the common symptoms as follows:
3. general checklist of symptoms of inadequate control
1. An unexplained decline in revenues and profits.
Executive Reality Check 2. A degradation of service (customer complaints).
Employees at the frontline often complain ~hat3. Employee dissatisfaction (complaints, grievances, turnover}.
management imposes certain requirements that are not4. Cash shortages caused by bloated inventories or delinquent
realistic. In a certain state college, for instance, requests accounts receivable.
for purchase of classroom materials and supplies take5. Idle facilities or personnel.
last priority. This is irregular because requests of such6. Disorganized operations (work flow bottlenecks, excessive
kind must be of the highest priority considering that the paperwork).
organization is an educational institution. Ironically,7. Excessive costs.
because certain officers of the nonacademic staff have8. Evidence of waste and inefficiency (scrap, rework). It must be
direct access to the president, their purchase requests noted that behind every symptom is a problem waiting to
almost always get top priority. Later on, when the be solved. Unless this problem is clearly identified, no
president made an inspirational speech on quality effective solution may be derived. Nevertheless,
teaching, many members of the faculty just shrugged problems are easily recognized if adequate control
their shoulders and listened passively. measures are in place.

One school, the Central Luzon State University, provides a good

example on how the executive reality check may be TEAM
exercised. It requires its executives to handle at least one What Is a Team?
subject load each. What the executives will experience in
the classroom will make him more responsive in the Teams are very different than groups. A group is
preparation of plans and control tools. defined as a number of people working together, or
considered together because of similarities. If working
together they interact to achieve a certain objective. The exploiting workers — in that team effectiveness can rely
group usually shares information but remains neutral. A on peer pressure and peer surveillance. However,
team is a special kind of group. A team is a group of Hackman argued that team effectiveness should not be
individuals who share a common goal and the viewed only in terms of performance. While
responsibility of achieving it. Teams are task - oriented performance is an important outcome, a truly effective
work groups; they can evolve or be appointed, either team will contribute to the personal well-being and
formally or informally The team attempts to achieve a adaptive growth of its members
positive collaboration among its members. A successful
team will work well with each other, achieve set goals, Compare the more structured/skilled concept of
and each member will have a feeling of self - worth. The a crew, the advantages of formal and
successful team will also be adaptive, flexible, and able informal partnerships, or the well-defined - but time-
to deal with conflicts as they arise. A formally appointed limited - existence of task forces.
team has an appointed team leader. The team leader Although the concept of a team is relatively
possesses the power to influence others and may have simple, social scientists have identified many different
more decision - making authority than others. The power types of teams. In general, teams either act as
to influence others is not the only difference between information processors, or take on a more active role in
team members and leaders. A head server is a good the task and actually perform activities. Common
example of a formally appointed team within a categories and subtypes of teams include:
restaurant. Power may be delegated to this server from
management. Delegation is when one gives a portion of Executive team
their responsibility and authority to a subordinate. The An executive team is a management team that draws up
leader may delegate the head server to do nightly plans for activities and then directs these activities
checkouts or voids throughout the evening. An (Devine, 2002). An example of an executive team would
informally appointed team will evolve on its own. It has be a construction team designing blueprints for a new
a rotation of leadership. The group leader does not have building, and then guiding the construction of the
formal power over the group. The informally appointed building using these blueprints.
team has some advantages over the formally appointed.
For instance, one person probably does not possess every Command team
quality needed to be the perfect leader. With the rotation The goal of the command team is to combine
of leadership everyone has a chance to show the qualities instructions and to coordinate action among
that they possess. management. In other words, command teams serve as
A team becomes more than just a collection of the "middle man" in tasks (Devine, 2002). For instance,
people when a strong sense of mutual commitment messengers on a construction site, conveying
creates synergy, thus generating performance greater instructions from the executive team to the builders,
than the sum of the performance of its individual would be an example of a command team.
members.
Project teams
Thus teams of game players can form (and re- A team used only for a defined period of time and for a
form) to practice their craft/sport. Transport logistics separate, concretely definable purpose,
executives can select teams of horses, dogs, or oxen for often[quantify] becomes known as a project team. This
the purpose of conveying passengers or goods. category of team includes negotiation-, commission- and
design-team subtypes. In general, these types of teams
While academic research on teams and are multi-talented and composed of individuals with
teamwork has grown consistently and has shown a sharp expertise in many different areas. Members of these
increase over the past recent 40 years, the societal teams might belong to different groups, but receive
diffusion of teams and teamwork actually followed a assignment to activities for the same project, thereby
volatile trend in the 20th century. The concept was allowing outsiders to view them as a single unit. In this
introduced into business in the late 20th century, which way, setting up a team allegedly facilitates the creation,
was followed by a popularization of the concept tracking and assignment of a group of people based on
of constructing teams. Differing opinions exist on the the project in hand.] The use of the "team" label in this
efficacy of this new management fad Some see "team" instance often has no relationship to whether the
as a four-letter word: overused and under-useful Others employees work as a team.
see it as a panacea that realizes the human-relations
movement's desire to integrate what that movement Advisory teams
perceives as best for workers and as best for managers. Advisory teams make suggestions about a final product
Still others believe in the effectiveness of teams, but also (Devine, 2002). For instance, a quality-control group on
see them as dangerous because of the potential for
an assembly line would be an example of an advisory group in regular contact that is engaged in coordinated
team: they may examine the products produced and action. The frequency of team members' interaction and
make suggestions about how to improve the quality of team's ongoing existence make a task team clearly
the items being made. different from either a short term decision-making group
(committee) or a project team in matrix structure.
Work teams
Work teams are responsible for the actual act of creating In particular, many teams monitor their own work, are
tangible products and services (Devine, 2002). The given training in mutual problem solving methods , share
actual workers on an assembly line would be an example their leadership responsibilities internally, accept and
of a production team, whereas waiters and waitresses at a even encourage conflict, and are measured on the basis
diner would be an example of a service team. of their collective (not individual outputs). However just
calling a group a team does not change its basic
Action teams character or effectiveness; months or even years may be
Action teams are highly specialized and coordinated needed for a team to achieve high-performance status.
teams whose actions are intensely focused on producing When the members of a task team know their objectives,
a product or service (Devine, 2002). An NFL football contribute responsibly and enthusiastically to do the
team would be an example of an action team. Other task, and support one another, they are exhibiting
examples occur in the military, paramedics, and teamwork. At least four ingredients contribute to the
transportation development of teamwork: a supportive environment,
skills matched to role requirements, superordinate goals,
Virtual Team and a team rewards. New teams typically progress
Developments in information and communications through a series of a developmental stages, which are
technology have seen the emergence of the virtual work- described in the following section.
team. A virtual team is a group of people who work
interdependently and with shared purpose across space, LIFE CYCLE OF A TEAM
time, and organizational boundaries using technology to
When a number of individuals begin to work at
communicate and collaborate. Virtual team members can
interdependent jobs, they often passthrough several
be located across a country or across the world, rarely
stages as they learn to work together as a team .
meet face-to-face, and include members from different
Thesestages of team development are not rigidly
cultures
followed, but they do represent a broadpattern that may
In their 2009 literature-review paper, Ale Ebrahim, N.,
be observed and predicted in many settings across the
Ahmed, S. and Taha, Z. added two key issues to
team's time together.The stages are the result of a variety
definition of a virtual team: "as small temporary groups
of questions and issues that the team predictably faces.
of geographically, organizationally and/ or time
In addition, members want to know which rules to
dispersed knowledge workers who coordinate their work
follow and what each person should contribute. The
predominantly with electronic information and
typical stages in a team's evolution can bedescribed as
communication technologies in order to accomplish one
follows:
or more organization tasks". Many virtual teams are
cross-functional and emphasize solving customer
problems or generating new work processes.
The United States Department of Laborreported that in FORMING- Members share personal information, start
2001, 19 million people worked from home online or to get to know and accept one another, and begin turning
from another location, and that by the end of 2002, over their attention toward the group's tasks. An aura of
100 million people worldwide would work outside courtesy prevails, and interactions are often cautious.
traditional offices STORMING- Members compete for status, jockey for
positions of relative control, and argue about appropriate
directions for the group. External pressures interfere
with the group, and tensions rise between individuals as
they assert themselves
TEAMWORK
NORMING- The group begins moving together in a
Individual employees perform operating tasks, but cooperative fashion, and a tentativebalance among
majority of them work in regular small groups where competing forces is struck. Group norms emerge to
their efforts must fit in together like pieces of a picture guide individual behavior, and cooperative feelings are
puzzle. Where their work in interdependent, they act as increasingly evident.
a task team and seek to develop a cooperative state
called teamwork. A task team is a cooperative small
PERFORMING- The group matures and learns to Promotion. Supportive environments offer people
handle complex challenges. Functional roles are protection from factors that can threaten good health.
performed and fluidly exchanged as needed, and task are They foster participation in health and let people expand
efficiently accomplished. their capabilities and self-reliance. This is critical for a
person-centered approach to health.
ADJOURNING- Even the most successful groups ,
committees, and project teams disband sooner or later. Supportive environments are sometimes referred to as
Their breakup is called adjournment, which requires supportive settings. Settings refer to environments where
dissolving intense social relations and returning to people live, learn, work and play, such as schools,
permanent assignments. The adjournment stage is hospitals, workplaces and cities. Creating supportive and
becoming even more frequent with the advent of flexible health promoting environments can have many
organizations, which feature temporary groups. dimensions and may include:
Advising new teams of these likely stages can be helpful ● direct political action to create policies and
to group members and their leaders. Awareness by all regulations, such as tobacco control legislation
team members can help them better understand what is ● providing financial incentives or disincentives, for
happening and work through the issues involved. Groups example, sponsoring alcohol-free events
are always different, of course; consequently, not all ● advocacy designed to gain political commitment,
teams will clearly experience all the stages of the life social acceptance or policy change, for example,
cycle. Some groups may be temporarily stuck in a supporting community groups to advocate banning
certain stage, and others may find themselves reverting junk food advertising to children
to an earlier stage from time to time. To expedite their ● providing education and empowerment, and
own development team members may find it useful to enabling communities and individuals to take control
know what elements help create successful teams. of their health and environment, for example,
teaching people in a disadvantaged community the
FACTORS OF EFFECTIVE TEAMS skills to research local health needs
Many studies have been conducted in an attempt to ● strengthening links between health and
isolate the factors that contribute most directly to team environmental strategies, including creating
success . Common items identified include careful partnerships, for example, working with sustainable
composition, information sharing, clear direction and living practices and implementing walking or
measurable goals for accountability, sufficient resources, cycling programs
integration and coordination, flexibility and ● ensuring equitable access to supportive
innovativeness, and the stimulation of openness to environments for health by mediating between
learning. The discussion will focus on four major factors conflicting interests in society, for example,
here ---- a supportive environment, appropriate skills and promoting sexual health and wellbeing for people
role clarity, superordinate goals, and team rewards. with disabilities being inclusive in plans involving
community
Supportive Environment Teamwork is most likely to ● being inclusive in plans involving community
develop when management builds a supportive members and staff, for example, consulting
environment for it. Creating such an environment community members to identify the best approaches
involves encouraging members to think like a team, to health and wellbeing
providing adequate time for meetings and demonstrating ● creating supportive settings for people using health
faith in members' capacity to achieve. Supportive services, for example, making waiting rooms feel
measures such as these help the group take the necessary welcoming for people with friendly staff, seating,
first steps toward teamwork. Since these steps contribute play areas for children, access to water and
to further cooperation, trust and compatibility, promotion of the role of the arts in health
supervisors need to develop an organizational culture ● promoting health in the workplace, for example,
that builds these conditions. Making healthy choices isn't implementing stress management programs for staff,
just about having personal self-discipline. In some helping staff quit smoking or providing healthy
neighborhoods it is easy to get fresh and affordable snack options in vending machines.
produce, while in other neighborhoods people are Skills and Role Clarity Team members must be
limited to fast food outlets, liquor outlets and reasonably qualified to perform their jobs and have the
convenience stores with less healthy choices. The most desire to cooperate. Beyond these requirements,
supportive environments make healthy choices the members can work together as a team only after all the
easiest choices. members of the group know the roles of all the others
with whom they will be interacting. When this
Creating supportive environments is one of the five
understanding exists, members can act immediately as a
action areas identified by the Ottawa Charter for Health
team members respond voluntarily to the demands of the vital. Understand what it means to do a good job as per
job and take appropriate actions to accomplish team the leader’s expectations. Then list down the degree of
goals. major characteristic of effective teams is clear effort that is expected to be put into a job. At this point
expectations about the roles played by each team in time, it is important to avoid overworking on low-
member. In such a team, action is taken and clear priority jobs, as that will not help in realizing the
assignments are made. These roles are duly accepted as company’s objectives.
well as carried out. Work needs to be distributed fairly
among team members, as per each person’s skill and Resources
capability. Each team always has limited resources. The aim is to
The manager needs to have the ability to give clear achieve the maximum with the minimum resources.
assignments in each work area. Understand what resources have been allocated to
perform a job. These resources may include things such
Work Methods as facilities, support staff, equipment, software, as well
as budget. Also understand how much control the team
Each team member needs to understand their leader’s has over resource decisions.
expectations regarding required work methods as well as
procedures. This is with regards to each job or project. Once the manager is able to clarify each work area, he
will be able to smoothen out the way for each of their
Time Frames team members. This way it will be easier for the team to
It is vital to understand the due dates for the completion achieve its objectives by making use of allocated time.
of projects. Determine when the dates have slipped and Superordinate Goals A major responsibility of
which completion dates are final and nonnegotiable. managers is to try to keep the team members oriented
This is because each task is connected to another in a toward their overall task. Sometimes, unfortunately, an
team. A delay in one task anywhere leads to a delay in organization's policies, record keeping requirements, and
the complete project. This way no organization will be reward systems may be fragment individual efforts and
able to meet its deadlines leading to huge losses for the discourage teamwork. A superordinate goal is something
company. that is big enough and compelling enough to aid
Work Responsibilities individuals and groups overlook personal differences in
order to achieve something significantly beyond their
Each team member’s role is to be clearly understood current reach, something that cannot be privately held by
when they are assigned to a given job or responsibility. any of the members, and is instead closer in nature to a
This is very important else too much time will be spent Commons.
due to wrong communications reaching team members.
Team Rewards Another element that can stimulate
Customer/Supplier Interface teamwork is the presence of team rewards. These may be
financial, or they may be in form of recognition.
Understand the leader’s expectations while dealing with
Rewards are most powerful if they are valued by team
all kinds of supplier problems. Similarly the customer
members, perceived as possible to earn, and
complaints or requests also need to be handled by each
administered contingent on the group's task performance.
team member as per the organization’s policies. After
In addition, organizations need to achieve a careful
all, effective relationships have to be built with other
balance between encouraging and rewarding individual
work groups in order to achieve the full potential of the
initiative and growth and stimulate full contributions to
team.
team success. Innovative (nonfinancial) team rewards for
Work Priorities responsible behavior may include the authority to select
new members of the group, make recommendations
Each person as well as each team will be loaded with a regarding a new supervisor, or propose discipline for
huge amount of work. It is important for each team team members.
member to understanding which jobs take priority at that
particular moment. Besides, changes in work priorities a way to compensate a group of people based on the
also take place due to changing circumstances. It is combined contribution to a project or the organization. It
important to be able to clearly differentiate between hot has become a widespread and motivating way to reward
jobs and other jobs. a group of people for their efforts to achieve a common
goal. As more companies utilize work groups to
Performance Expectations complete projects and create a team environment,
Understand what the leader expects in the way of desired offering an incentive to the members based on the
outcomes. At this point in time, open communication is group's performance has become a more common and
acceptable way to encourage team members to motivation, however, plays a powerful role in teams
collaborate. success. Team members will more likely feel more
motivated and empowered when they:
Let's imagine you've been added to a team to create a
new, innovative countertop cooker that keeps food cold ● Share sense of potency (have a-can do attitude)
until the delayed cook time feature kicks in. It's a large ● Experience meaningfulness ( have a commitment to
project that will likely take about a year to complete. a worthwhile purpose)
Your company is taking a new approach to project ● Are given autonomy (have freedom and discretion to
management. Rather than the project moving through control resources and make decisions)
departments, representatives from each department will ● See their impact on results (can assess, monitor, and
work exclusively on the team to create, test, launch, and celebrate their contributions and results)
sell the new appliance. Incentives have been created to The interactive combination of these four forces can
offer encouragement and support to ensure the project produce dynamic teams capable of being productive and
stays on schedule. If each of the deadlines is met, each proactive as well as providing outstanding customer
member of the team will earn a bonus. Once the project service.
is complete and the new appliance is released for sale,
additional bonuses will be offered when the appliance Dynamic Teams
hits sales targets. “Successful teamwork is not about mastering subtle,
Types of Team-Based Reward Systems sophisticated theories, but rather about embracing
common sense with uncommon levels of discipline and
There are three common systems that are used to offer persistence. Ironically, teams succeed because they are
team-based rewards: these are deadline-driven targets, exceedingly human. By acknowledging the
incentive bonuses, and profit sharing. imperfections of their humanity, members of functional
teams overcome the natural tendencies that make
Deadline-driven targets, sometimes called recognition teamwork so elusive.” - Patrick Lencioni
pay, are a reward system based on hitting specific goals
by a definite due date. If a team reaches the objective on Dynamic teams are vital to the success of the
time, the team earns a bonus. In the previous example, organization, it signifies that the employees are working
your team is assigned to create a working prototype for towards a shared vision. So many teams struggle to
the new appliance within three months of project start. If overcome challenges that may keep them from achieving
this target is met, each member will receive a $500 these share goals. Teams face challenges such as lack of
bonus. This bonus encourages the team to work together, trust, poor communication, lack of accountability and
accomplish the goals together, and meet the three-month conflict. According to a survey conducted by the Center
deadline.An incentive bonus is a plan that allows for an for Creative Leadership, teams function below the
extra payment for increasing performance. Sales groups optimal level.
frequently use this form of reward. If the team reaches a
pre-determined number of sales, they receive a bonus or A team that is performing at a high level is able to
commission on those sales. In the countertop cooker capitalize on the strengths of the members and focus on
example, your team goal was to sell 10,000 units of the results. Each team member brings her/his own strengths,
new appliance in the first three months. The marketing experiences, opinions and ideas to the team, and this
and sales professionals on your team have worked very diversity helps build a strong team. Another benefit is
hard to place the appliance in national chain stores and that there is an increased ability for individual teams to
online, while the rest of the team helped support those collaborate with other teams in the organization.
activities. As a result, there were 15,000 units sold in the Dynamic teams have the ability to develop strategies to
first three months. This allowed the team to earn an extra handle challenges that arise as they work together to
$5,000 each as an incentive bonus.Profit sharing is a achieve their goals.
type of team-based reward that offers employees a small
portion of the profit from the performance of the
company. It encourages the entire staff to work together,
Objectives
reach common goals, minimize expenses, and reach
targets that will help the company achieve the greatest ● Identify the benefits of high performance teams
profit. An increase to the bottom line equals an increase ● Define the different stages of team development
in each employee's compensation. ● Discuss fundamentals of high performing teams
● Develop strategies that will help improve
teamwork
Empowered Teams The previous discussion focused on
four structural ingredients for effective teams. Member
POTENTIAL TEAM PROBLEMS may not result in improved performance. For example,
when employees think their contributions to their group
Effective teams in action are joy to observe. Members cannot be measured, they may lessen their output and
are committed to the firm's success, they share common engage in social loafing (the free-rider effect). Causes of
values regarding product quality, safety, and customer social loafing include a perception of unfair division of
satisfaction, and they share responsibility for labor, a belief that co-workers are lazy, or a feeling of
completing a project on schedule. However, many being able to hide in the crowd and therefore not be able
different types of problems can arise within groups. to singled out for blame. Social loafing may also arise if
Two troublesome team problems involve changing a member believes that others ten to withhold their
membership and social loafing. efforts and thus he or she would be foolish not to do the
same--- the sucker effect
Changing Composition Being complex and dynamic,
teamwork is sensitive to all aspects of organizational The impact of social loafing extends beyond simply the
environment. Like the mighty oak, teamwork grows heavier workload on responsible team members.
slowly, but on occasion it declines quickly, like that Colleagues may experience anger toward low performer,
same oak crashing to the forest floor. For example, too feel moments of empathy, or complain to their peers or
many changes and personnel transfers interfere with to their supervisor. More constructively, co-workers may
group relationships and prevent the growth of teamwork. express expectations for improvement to the loafer,
attempt to train the individual, or for pep talks (or even
Rarely does a team's composition remain constant from threats, unfortunately)
the beginning to end of its task life. Members may be
drafted onto higher priority projects, they may be Since an improperly managed team can result in
experience a personal crisis and take a family medical numerous problems, an effective manager needs to apply
leave, or they may be lure away to another company by contingency framework to determine whether to use a
better working conditions and rewards. And some team approach. It is wise to analyze the nature of the
teams—most notably those in the collegiate spots task, the qualifications an desires of the participants, and
domain---automatically experience personnel changes as the time and cost constraints. Many managers have
a players depart for the professional arena or fond other found managing teams to be a whole new set of
priorities in their lives. As a consequence, most team challenges after years of one-on-one supervision.
must learn to manage their internal turnover. TEAM BUILDING
How do they do this? The first key is to anticipate an Team members must work together to be effective;
accept that turnover within the team will happen an likewise, cooperation is needed among all the teams that
come grips with that likelihood. The second is to make up the while organization. Higher-level managers
develop a plan for managing team turnover right from need to integrate all these groups into one collaborative
the start. How much notice do they expect to receive? group. To do this, managers often rely heavily on team
What steps must they engage in to obtain authorization building for both individual teams and large groups.
to find new members? How will they recruit new Team building encourages team members to examine
additions? The third , and possibly most critical step is to how they work together, identify their weaknesses, and
think through how best to integrate new members. How develop more effective ways cooperating. The goal is to
can they be made to fee welcome? What background make the team more effectiveTo be effective people
materials an training do they need to receive? How long need to work together toward a common goal in a
will they need to get up to speed? How can they be coordinated and cooperative way. Therefore you could
helped to see the big picture as well as how each say that team building is a systematic process designed
member fits into it? How will they be exposed to the to improve working relationships and team functioning
team's values, norms, and objectives? In essence, a such as problem solving, decision making and conflict
highly functioning team needs to recognize a new resolution that enables the group to overcome any goal
member as an opportunity for its improvement and blocking barrier. For many this result orientated mission
return at least briefly to earlier stages of the team is the real purpose for team building. A team building
development process. goal therefore could be simply to identify and develop
Social Loafing Other potential problems also exist. effective communication.Another way of looking at it is
The departure from classical lines of authority may be that team building is like coaching but for a collective
difficult for more employees to handle responsibly. The group. Team Building formalizes the power of
extensive participation in decision making consumes collaboration among what otherwise might be excluded
large amounts of time. Experimentation with team or often alienated individuals. For many team building is
activities may lead to charges partially from other a way to blend talent, skills and the creativity of a group.
employees. Also, the combination of individual efforts With collaboration at its heart, team building
improves cooperation, time and resource management specific team building goals are to provide team
for their benefit of an organization or team. members with:
The consequence is that effective team building ● Clarification of mission and vision
produces better, faster results and provides a satisfying ● Establishment of team members roles and
and motivating experience for team members. responsibilities
● Faster start up for new teams or teams with new
Some reasons why team building is so important are: leaders
● Most organizations are so complex and with de- ● Mechanisms for resolving conflict and elimination
layering there has to be team building for them to of dysfunctional behavior
succeed. ● An appreciation of differences in work styles and
● Everyone needs to be working towards common preferences
goals (that team building will generate and nurture) ● Team building roles
which need to be attainable and clearly ● For team building to work the roles and duties
communicated. contained within team working structures have to be
● Team building environments will outperform none determined.
team based environments. Teams could, for example, be:
Let us consider further why is team building is so ● A small group (typically 5 to 15 employees) which
important – team building will make favorable impact “owns” a distinct part of the process and whose
in six key areas: members are flexible within the group
● Task Achievement – teams are not designed for ● Aware of its customer’s needs (both internal and
dealing with simple, repetitive tasks, as individuals external)
will generally be quicker. However, team building ● The instrument for maintaining quality levels
comes into its own when faced with complex tasks, ● Responsible for its own housekeeping
and associated problems, where probably there is no ● Left alone to undertake routine maintenance of plant
single, correct answer. and equipment
● Quality of Decisions – team building can generate ● Empowered to work out how its objectives fit in
more ideas than any one individual therefore, it has with the company’s mission
the choice of many possibilities before it and the ● Tasked with making decisions on issues affecting
ultimate quality of the decision is likely to be better the group
than an individual’s decision. ● Trained in problem solving techniques
● Accuracy of Decisions – judgments are far better ● Responsible for safety issues
through team building than through individual ● Part of the selection process
assessment of tasks that involve random error ● Self-determining on manning assignments and
because team deliberation tends to purge ill- covering absent members
conceived notions and weak individual thinking. ● Involved in layout of plant and equipment
● Risk taking – it has been shown that team building ● Continually striving to improve the product, service
creates confidence to take greater, but measured, and delivery process
risks (and seize opportunities) than individuals What is the team building process?
would. Everyone at work whether they are an operator or the
● Motivation – team building enhances morale and Managing Director have worked with others in a team.
spurs individuals on to perform effectively at a Therefore all can express views on what constitutes an
higher level. effective team building process. However, making team
● Speed of learning – team building creates a building succeed is often not as simple as it sounds.
progressive, but nurturing, environment enabling Problems with team building tend to be caused by team
team members to learn faster than individuals members who do not know very much about the team
working alone. building process.
Put more straightforwardly team building is important
because it helps the group to capitalize on their strengths The task of team building is first to establish what the
and minimize their weaknesses. The synergy that comes team was established to achieve. The team building
from team building can be very powerful. process therefore must consists of all the things which go
to make up how the team goes about achieving the task,
Team building goals and what influences it whilst doing so. The team
For many organizations team building has become an building process follows a pattern. A highly participative
integral part of their organizational strategy. Their process is used, with team members providing data and
then using the date for self-examination. Often a skilled
facilitator may assist the members diagnosing and The essence of effective team building is that the
addressing a problem. Data are collected from individual members of the team work well together either as a
group members and then fed back to the team for group from the outset or initially simply compliment
analysis. While the group works on development of each other as individuals in which case the team building
action plans, members also encouraged to direct equal process will progress smoothly. The potential
attention toward group learns to evaluate and improve its compatibility of any particular individual with the rest of
own effectiveness. The result of this continuing process the team is therefore critically important for team
can be a high-performance team with high levels of building to succeed. (Meredith Belbin has done much
morale and cooperation. work in support of team building in the area of team
roles analysis).
There are many aspects to this team building thinking
and here are a few: Individuals need to understand and learn the skills that
make effective team building possible. Most know how
● The team building structure – if there are a large to work independently or to give up uniqueness to aid
number of team members it is often difficult to get a team building, but to maintain some individuality during
reasonably fair discussion going. If there are too few the team building process and subsequently during team
there may be a series of silences. If some of the team working is to many too great an evolutionary step to
members are of a higher status in the organization take. Team members need to understand that team
than others, then this could be inhibiting discussion building succeeds with diversity and creativity.
and therefore arrest the team building process. If
there is insufficient expert knowledge in the team
then opinions rather than facts will be offered which
can often lead to arguments and therefore destroy the Team coaching is vital to team success---success
team building process.. especially for new teams. Coaching involves a leader's
● The nature of the individuals – Differences in intentional effort and interaction with a team to help its
personality and mood often show up during team members make appropriate use of their collective
building – some people can’t seem to stop talking resources. Research has shown that coaching is most
whilst others keep quiet, and others try to act as effective when it is task-focused, timely, recognized as
umpires or referees. All team building discussions necessary by the team, and oriented toward one of three
need to be controlled by the individuals and by a unique issues: motivation of members, performance
chairperson. method improvements, or knowledge/ skills deficiencies.
● The environment of the team meeting – The size of The Need for Team Building
the meeting areas, its shape, heating, ventilation,
lighting, seating, acoustics and decorations can all Not every team needs to engage in team building, nor
affect the efficiency of team meetings and therefore does even poor team need to devote constant attention to
the team building process. it. Many teams, however, could benefit from at least
● The way decisions are made – For team building occasionally re-examining how they operate.
behavior to take place, in a team meeting trying to Fortunately, a variety of clues can be detected that
reach a decision, then the communication process provide evidence when it is more appropriate to devote
must cultivate listening and foster fairness if attention to the team-building process. These signals
commitment and consensus and with it team include:
building is to be realized.
● Interpersonal conflicts among team members, or
A key to team building is that of creating a shared vision
between the team and its leader
but that takes time and requires the full participation of
● Low degree of team morale or low team
all. If team members do not have a personal vision or
cohesiveness
lack confidence to it then team building will become
● Confusion or disagreement about roles within the
difficult if not untenable.
team
Team member selection for effective team building ● Large influx of new members
● Disagreement over the team's purpose and tasks
To make team building effective team member selection ● Negative climate within the team, evidenced by
is clearly very important. All to often team building is criticism an bickering
dismissed as the assembly of a group of individuals, ● Stagnation within the team, with members resisting
calling them a team and telling them to get on with it. change and new ideas
(This may explain why so many have difficulty getting In cases like this, it is likely that team building id called
the team building process to deliver the potential for and will have a positive effects on the team's
organizational benefits). functioning.
Specific Team Building Issues while, the process consultant is attempting to help other
people to learn help themselves. In other words, the goal
Team building usually focuses on one or more specific is to create independence in team members so that they
types of problems. If team members seem to be unaware can more effectively think an act for themselves.
of, or in disagreement about, the purpose of the team,
then the focus might best be placed on clarifying the Feedback Team members need feedback so that they
goals and priorities of the team. When the team is have useful data on which to base decisions. Feedback
confused about its best fit within the larger encourages them to understand how they are seen by
organizational system, the focus might be on the nature others within their team to take self-correcting action.
of the organization's culture, its workplace facilities, its
strategic directions, or the reward system. When there is Any team can use process consultation and feedback for
confusion about work relationships between people and its self-development. The need for continuous
tasks, job functions may need definition, authority improvement is a cornerstone of total quality
relationships might be revisited, and the patterns of work management programs, and a focus on teams is a critical
flows might require clarification. When interpersonal structural element of many organizations as they operate
conflicts seem to dominate the workplace, issue of in the twenty-first century.
respect and trust might be explored, listening skills Characteristics of Mature Team When teams
might be reviewed, or various models for understanding regularly find themselves achieving and even surpassing
interpersonal styles might be introduced. In effect, the their goals, they have attained the fourth stage of team
best team-building approach is one that is carefully built development model. Is this realistic? Yes. Many teams
upon database uncovered during the second stage and have highly effective, although it seldom happens.
tailored to fit the specific team and team problem.
What do most successful teams look like? They typically
Skills Useful in Team Building exhibit several attitudinal and behavioral characteristics
The facilitator who assist the development of effective that organizations value. Members take pride in their
teams need to apply a broad range of skills, including achievements and contributions to their colleagues; they
consultation skills, interpersonal skills, research skills, feel comfortable asking questions when they don't
and presentational skills. Two additional and closely understand something; no one dominates the team or is a
related skills stand out as critical to success---process wallflower; members know how to criticize other
consultation an feedback. These are skills that both team constructively and accept feedback from others; there is
leaders and team members need. an atmosphere of respect and trust; the group is not
threatened by instability or change; the atmosphere is
Process Consultation In contrast to the role experts and relatively informal and tension-free; and members
problem solvers, team building calls for yet another role- encourage and assist each other. “They are”, as one
--that of process consultant. Process consultation is a set team member put it, “a joy to behold, and to be a part of”
of activities that help others focus on what is currently Most of all, of course, the team consistently achieves its
happening around them. In effect, the process consultant goals and sets progressively higher standards for itself.
holds up a mirror to team members and help them see
themselves in action. The intent of process consultation
is straightforward: to help team members perceive,
understand, and react constructively to current
behavioral events. Process consultant or team facilitators MANAGING PRODUCTION AND SERVICE
encourage employees to examine their intended versus OPERATIONS
their actual roles within the team, the ways in which the
Organizations are designed mainly to produce products
team discusses and solves problems, the use and abuse
or services. If these organizations must survive and
of power and authority, and the explicit and implicit
grow, the operations function must be undertaken in the
communication patterns.
most economical manner possible. As most companies
Process consultants are helpers, drawing upon several are expected to make profits, any activity, including
key facilitating behaviors. They observe team meetings, those for operations must be managed to contribute to
recording conversational patterns an non-verbal the accomplishment of such objectives.
behaviors. They ask probing questions designed to help
WHAT OPERATIONS IS
others identify problems. They resist “owning” the
team's problems, taking them off the hook, or giving Operations refers to "any process that accepts inputs and
expert advice, If necessary, they confront individual by uses resources to change those inputs in useful ways.”
asking them to examine their behavior and its As shown in Figure 10.1, the inputs include land, labor,
consequences or to explore new alternatives. All the
capital, and entrepreneurship. The transformation The engineer manager is expected to produce some
process converts the inputs into final goods or services. output at whatever management level be is. If he is
assigned as the manufacturing engineer, his function is
Examples of final goods and services are as follows: "to determine and define the equipment, tools, and
1. Industrial chemicals like methylene chloride, borax processes required to convert the design of the desired
powder, phosphoric acid, etc., which are produced by product into reality in an efficient manner."
chemical manufacturing firms; The engineer in charge of operations in a construction
2. Services like those for the construction of ports, high- firm is responsible for the actual construction of
rise buildings, roads, bridges, etc., which are produced whatever bridge or road his company has agreed to put
by constructions firms; up. He is required to do it using the least-expensive and
the easiest methods.
3. Electrical products like transformers, circuit breakers,
switch gears, power capacitors, etc., which are produced The engineer, as operations manager, must find ways to
by electrical manufacturing firms; contribute to the production of quality goods or service
and the reduction of costs in his department.
4. Electronic products like oscilloscope, microwave tests
systems, transistors, cable testers, etc., which are The typical operations manager is one with several years
produced by electronics manufacturing firms; of experience in the operations division and possesses an
academic background in engineering.
5. Mechanical devices like forklifts, trucks, loaders, etc.,
which are produced by manufacturing firms; TYPES OF TRANSFORMATION PROCESS

6. Engineering consultancy services like those for The engineer manager must have some knowledge of the
construction management and supervision, project various types of transformation process. They are as
management services, etc., which are produced by follows:
engineering consultancy firms. 1. Manufacturing processes
WHAT OPERATIONS MANAGEMENT IS a) job shop
b) batch flow
Operations is an activity that needs to be managed by c) worker-paced line flow
competent persons. Aldag and Stearns accurately d) machine-paced line flow
defined operations management as "the process of e) batch/continuous flow hybrid
planning, organizing, and controlling operations to f) continuous flow
reach objectives efficiently and effectively.” As the
terms "planning", "organizing", and "controlling" have 2. Service processes
already been discussed in the previous chapters, a) service factory
elaborations on the terms "efficiency" and b) service shop
"effectiveness” will be made. c) mass service
d) professional service
Efficiency is related to "the cost of doing something, or
the resource utilization involved.” When a person
performs a job at lesser cost than when another person MANUFACTURING PROCESSES
performs the same job, he is more efficient than the other
person. Manufacturing processes are those that refer to the
making of products by hand or with machinery.
Effectiveness refers to goal accomplishment. When one
is able to reach his objectives, say produce 10,000 units Job Shop. A job shop is a type of manufacturing process
in one month, he is said to be effective. in which small batches of a variety of custom products
are made. In the job shop process flow, most of the
Operations management must be performed in products produced require a unique set-up and
coordination with the other functions like those for sequencing of process steps. Job shops are usually
marketing and finance. Although the specific activities businesses that perform custom parts manufacturing for
of the operations divisions of firms slightly differ from other businesses. Products may be manufactured within
one another, the basic function remains the same, i.e., to a short notice. The equipment used are of the general
produce products or services. Figures 10.2 and 10.3 purpose type.
show typical responsibilities of the operations divisions
of two different firms. However, examples of job shops include a wide range
of businesses—a machine tool shop, a machining center,
OPERATIONS AND THE ENGINEER MANAGER a paint shop, a commercial printing shop, and other
manufacturers that make custom products in small lot 1. The process is of clear, rigid pattern.
sizes. These businesses deal in customization and 2. Specialized type of equipment is used.
relatively small production runs, not volume and 3. The line flow layout is used.
standardization. 4. Capital equipment is a bigger cost item than labor.
5. Operation is large.
The type of layout used by job shops is the process 6. The process is machine-paced.
layout, where similar machines are grouped together.
The typical size of operation is generally small. Job
shops are labor intensive and machines are frequently Examples of machine-paced assembly line are auto
idle. Figure 10.4 shows a process flow diagram for a job mobile manufacturers like General Motors and Ford
shop. Motors. Shown in Figure 10.7 is an example of a
machine-paced assembly line process.
Batch Flow. The batch flow process is where lots of
generally own designed products are manufactured. It is Continuous Flow. The continuous flow processing is
further characterized by the following: characterized by “the rapid rate at which items move
through the system." This processing method is very
1. There is flexibility to produce either low or high appropriate for producing highly standardized products
volumes. like calculators, typewriters, automobiles, televisions,
2. Not all procedures are performed on all products. cellular phones, etc. Its other characteristics are as
3. The type of equipment used are mostly for general follows:
purpose.
4. The process layout is used. 1. There is economy of scale in production, resulting
5. The operation is labor intensive, although there is to low per unit cost of production.
less machine idleness. 2. The process is clear and very rigid.
6. The size of operation is generally medium-sized. 3. Specialized equipment are used.
4. The line flow layout is used.
Examples of factories using the large batch flow are 5. Operations are highly capital intensive.
wineries, scrap-metal reduction plants, and road-repair 6. The size of operations is very large.
contractors. 7. Processing is fast.
Worker-Paced Assembly Line. An assembly line refers
to a production layout arranged in a sequence to Batch/ Continuous Flow Hybrid. This method of
accommodate processing of large volumes of processing is a combination of the batch and the
standardized products or services. Shown in Figure 10.6 continuous flow. Two distinct layouts are used, one for
is a diagram of the work flow in an assembly line. batch and one for the continuous flow. The typical size
of operation is also very large giving opportunities for
The quality and quantity of output in a worker-paced economies of scale.
assembly line depends to a great extent to the skill of the
labor utilized. Examples of worker-paced assembly lines Examples of companies using the batch/continuous flow
are food marts like McDonalds and Shakey’s. hybrid are breweries, gelatin producers, and tobacco
manufacturers.

The worker-paced assembly line is characterized by the

following: SERVICE PROCESSES
1. The products manufactured are mostly standardized. Service processes are those that refer to the
2. There is a clear process pattern. provision of services to people by hand or with
3. Specialized equipment is used machinery.
4. The size of operation is variable.
5. The process is worker-paced. Service Factory
6. The type of layout used is the line flow. A service factory offers a limited mix of services
7. Labor is still a big cost item. which results to some economies of scale in operations.
This also affords the company to compete in terms of
Machine-Paced Assembly Line. This type of price and speed of producing the service.
production process produces mostly standard products The process layout preferred by the service
with machines playing a significant role. Among its factory is the rigid pattern of line flow processing.
other features are as follows:
McDonalds and Shakeys are also examples of service 4. Installing auxiliary capacity or hiring
factories. subcontractors.
5. Using multiskilled floating staff.
Service Shop 6. Installing customer self-service.
A service shop provides a diverse mix of IMPORTANT PARTS OF PRODUCTIVE
services. The layout used are those for job shops or fixed SYSTEMS
position and are adaptable to various requirements. Productive systems consist of six important activities
Service shops abound throughout the as follow:
Philippines. Examples are Servitek and Megashell. 1. Product design
Among the services provided by these shops are car 2. Production planning and scheduling
engine tune-up, wheel balancing, wheel alignment, 3. Purchasing and materials management
change oil, etc. 4. Inventory control
Mass Service 5. Work flow layout
6. Quality control
A mass service company provides services to a Product Design
large number of people simultaneously. A unique
processing method is therefore necessary to satisfy this Product design is the process of efficient and
requirement. To be able to serve many people, mass effective idea generation and development with the goal
service companies offer limited mix of services. of creating new products. Product design includes all
the engineering and industrial design work that goes into
The process layout used is typically fixed developing a product from the initial concept to
position where customers move through the layout. production, which ensures that it works reliably, is cost
Below is an example of a process layout. effective to manufacture and looks good.
Professional Services Companies wanting to maintain or improve its market
share keeps a product design team composed of
These are companies that provide specialized
engineers, manufacturing, and marketing specialists.
services to other firms or individuals. Example of such
firms are as follows: Production Planning and Scheduling
1. Engineering or management consulting services Production planning is the process of creating
which help in improving the plant layout or the a product idea and following through on it until
efficiency of a company. the product is introduced to the market. Additionally, a
2. Design services which supply designs for a physical small company must have an exit strategy for
plant, products, and promotion materials. its product in case the product does notsell.
3. Advertising agencies which help promote a firm’s
products. Production planning is a very important activity
4. Accounting services. because it helps management to make decisions
5. Legal services. regarding capacity. When the right decisions are made,
6. Data processing services. there will be less opportunities of wastages.
7. Health services. Scheduling is the “phase of production control
Professional service firms offer a diverse mix of involved in developing timetables that specify how long
services. There is a lower utilization of capital each operation in the production process takes.” Efficient
equipment compared to the service factory and the scheduling assures the optimization of the use of human
service shop. The process pattern used is very loose. The and non-human resources.
process layout used is identical to the job shop.
Purchasing and Materials Management
Professional service firms are oftentimes faced
with delivery problems brought about by nonuniform Materials management refers to the “approach
demand. Strategies that may be used depending on the that seeks efficiency of operation through integration of
situation are as follows: all material acquisition, movement, and storage activities
in the firm.”
1. The use of staggered work-shift schedules.
2. The hiring of part-time staff. Inventory Control
3. Providing the customer with opportunity to
select the level of service. Inventory control is the processes employed to
maximize a company's use of inventory. The goal
of inventory control is to generate the maximum profit
from the least amount of inventory investment without
intruding upon customer satisfaction levels.
As supplies and materials are required by firms
in the production process, these must be kept available
when they are needed. Too much reserves of stocks will
penalize the firm in terms of high storage costs and other
related risks like obsolescence and theft. Too little
reserves, on the other hand, may mean lost income
opportunities if the production activities are hampered.
A balance between the two extremes must be
determined.
The ways of achieving proper inventory control are as
follows:
1. Determining reorder point and reorder quantity
2. Determining economic order quantity
3. The use of just-in-time (JIT) method of
inventory control.
4. The use of the material requirement planning
(MRP) method of planning and controlling
inventories.
Work-Flow Layout
Work-flow layout is the process of determining
the physical arrangement of the production system. In
the transformation process, the flow of work may be
done either haphazardly or orderly.
Benefits of having a good work-flow layout:
1. Minimize investment in equipment.
2. Minimize overall production time.
3. Use existing space most effectively
4. Provide for employee convenience, safety, and
comfort.
5. Maintain flexibility of arrangement and operation.
6. Minimize material handling cost.
7. Minimize variation in types of material-handling
equipment.
8. Facilitate the manufacturing (or service) process.
9. Facilitate the organizational structures.

Quality Control MANAGING THE MARKETING FUNCTION

Quality control refers to the measurement of Engineer managers are engaged in the production of
products or services against standards set by the tangible or intangible goods. Some of these engineer
company. Certain standard requirements are maintained managers are directly responsible for marketing the
by the management to facilitate production and to keep company's products or services. If he is promoted as
customers satisfied. general manager, both the production and marketing
functions become his overall concern.
Poor quality control breeds customer complaints,
returned merchandise, expensive lawsuits, and huge At whatever management level the engineer manager
promotional expenditures. works, he must be concerned with convincing others to
patronize his outputs. If he is the general manager of a
construction firm, he must convince people with
construction needs to avail of the services of the
company. If he is the staff officer of a top executive, he or not a sale will be made. This does not hold true,
must convince his boss to continuously rely on him however, in the selling of services and ideas. This is
regarding the staff services he provides. because of the uniqueness of every service rendered or
every idea generated.
If the foregoing statements are true, the engineer
manager has a marketing problem. He needs to When a type of service becomes standardized,
understand certain concepts related to the marketing price can be a strong competitive tool. When a
discipline. construction firm, for instance, charges a flat 10 percent
service fee for all of its construction services, a
WHAT IS MARKETING? competitor may charge a lower rate. Such action,
however, will be subject to whether or not the industry
Marketing is a group of activities designed to will allow such practice.
facilitate and expedite the selling of goods and services.
The Place
The marketing concept states that the engineer
must try to satisfy the needs of his clients by means of a If every factor is equal, customers would prefer
set of coordinated activities. When clients are satisfied to buy from firms easily accessible to them. If time is of
with what the company offers, they continually provide the essence, the nearest firm will be patronized. It is very
business. important for companies to locate in places where they
can be easily reached by their customers. Not every
THE FOUR P'S OF MARKETING place is the right location for any company.
The engineering organization will be able to When a company cannot be near the customers,
meet the requirements of its clients (or customers) it uses other means to eliminate or minimize the effects
depending on how it uses the four P's of marketing of the problem. Some of these means are:
which are as follows:
1. hiring sales agents to cover specific areas;
1. the product (or service) 2. selling to dealers in particular areas;
2. the price 3. establishing branches where customers are located;
3. the place, and 4. establishing franchises in selected areas.
4. the promotion
The Promotion
The Product
When engineer managers have products or
In the marketing sense, the term “product" services to sell, they will have to convince buyers to buy
includes the tangible (or intangible) item and its capacity from them. Before the buyer makes the purchasing
to satisfy a specific need. When a customer buys a car, decision, however, he must first be informed, persuaded,
he is actually buying the comfortable ride he anticipates and influenced. The activity referred to, in this case, is
to derive from the car. This is not to mention the called promotion.
psychological benefits attached to the ownership of a
car. The services provided by the engineer manager will McCarthy and Perreault define promotion as
be evaluated by the client on the basis of whether or not “communicating information between seller and
his or her exact needs are met. When a competitor comes potential buyer to influence attitudes and behavior."
into the picture and sells the same type of service, the There are promotional tools available and the
pressure to improve the quality of services sold will be engineer manager must be familiar with them if he wants
felt. When improvement is not possible, "extras" or to use them effectively. These tools are as follows:
"bonuses" are given to clients. An example is the
construction company that provides “free estimates" on 1. advertising
whatever inquiries on construction are received. 2. publicity
3. personal selling
The Price 4. sales promotion
Price refers to "the money or other
considerations exchanged for the purchase or use of the Advertising.Nylen defines advertising as "a paid
product, idea, or service." Some companies use price as message that appears in the mass media for the
a competitive tool or as a means to convince the purposeof informing or persuading people about
customer to buy. particular products, services, beliefs, or action."

When products are similar in quality and other Publicity. The promotional tool that publishes
characteristics, price will be a strong factor on whether news or information about a product, service, or idea on
behalf. of a sponsor but is not paid for by the sponsor is the option of serving entirely or just the portion of it’s
called publicity. The mass media is also the means used chosen market.
for publicity. If the engineer manager knows how to use
it, publicity is a very useful promotional tool. His Targeting a specific market does not mean that you are
message may be presented as a news item, helpful excluding people who do not fit your criteria. Rather,
information, or an announcement. target marketing allows you to focus your marketing
dollars and brand message on a specific market that is
Personal Selling. A more aggressive means of more likely to buy from you than other markets. This is a
promoting the sales of a product or service is called much more affordable, efficient, and effective way to
personal selling. It refers to the "oral presentation in a reach potential clients and generate business.
conversation with one or more prospective purchasers
for the purpose of making a sale." Personal selling may For example, an interior design company could choose
be useful to the marketing efforts of the engineer to market to homeowners between the ages of 35 and 65
manager. If, for instance, he is the general manager of a with incomes of $150,000-plus in Baton Rouge,
firm manufacturing spare parts, he may assign some Louisiana. To define the market even further, the
employees to personally seek out spareparts dealers and company could choose to target only those interested in
big trucking companies to carry their product lines. kitchen and bath remodeling and traditional styles. This
market could be broken down into two niches: parents
Sales Promotion. Any paid attempt to on the go and retiring baby boomers.
communicate with the customers other than advertising,
publicity, and personal selling, may be considered sales With a clearly defined target audience, it is much easier
promotion. This includes displays, contests, to determine where and how to market your company.
sweepstakes, coupons, trading stamps, prizes, samples, Here are some tips to help you define your target market.
demonstrations, referral gifts, etc. A. Look at your current customer base.
STRATEGIC MARKETING FOR ENGINEERS Who are your current customers, and why do they buy from you?
Look for common characteristics and interests. Which
Companies, including those managed by engineer ones bring in the most business? It is very likely that
managers, must serve markets that are best fitted to their other people like them could also benefit from your
capabilities. To achieve this end, a very important product/service.
activity called strategic marketing is undertaken. B. Check out your competition.
Who are your competitors targeting? Who are their current
Strategic management provides the environment that customers? Don't go after the same market. You may
encourages the development of strategic concepts. To find a niche market that they are overlooking.
encourage this focus, numerous academic and business C. Analyze your product/service.
writers have proposed various strategic planning modelsWrite out a list of each feature of your product or service. Next
(Davis 1987; McCabe and Narayanan 1991; Mintzberg to each feature, list the benefits it provides (and the
1994; Lemmon and Early 1996; Thompson and Brooks benefits of those benefits). For example, a graphic
1997). These strategic planning models provide specific designer offers high-quality design services. The benefit
instructions for approaching, executing, and evaluating is a professional company image. A professional image
the development of strategic concepts. For example, a will attract more customers because they see the
common model emphasizes the need for an organization company as professional and trustworthy. So ultimately,
to: (1) build a strategic planning team; (2) set the the benefit of high-quality design is gaining more
strategic planning objectives; (3) gather member input; customers and making more money.
(4) synthesize the developed ideas; (5) develop anOnce you have your benefits listed, make a list of people who
implementation plan; (6) execute the plan; and (7) have a need that your benefit fulfills. For example, a
evaluate the success of the ideas prior to the start of the graphic designer could choose to target businesses
next strategic planning timeframe. interested in increasing their client base. While this is
Under this set-up, the following steps are made: still too general, you now have a base to start from.
D. Choose specific demographics to target.
1. Selecting a target market Figure out not only who has a need for your product or service,
2. Developing a marketing mix but also who is most likely to buy it. Think about the
Selecting a Target Market following factors:
1. Age
A market consists of individuals or organizations, or
2. Location
both, with the desire and ability to buy specific product
3. Gender
or service. To maximize sales and profits, a company has
4. Income level
5. Education level
 6. Marital or family status You should already know who your target market is and
7. Occupation what niche you want to service; you can prepare the
8. Ethnic background marketing mix to meet those needs. Ask yourself what
E. Consider the psychographics of your target. financial and other business goals, such as expansion or
Psychographics are the more personal characteristics of a person, increased profit margins, you want to achieve. Then
including: develop the marketing mix with these goals and
1. Personality objectives in mind.
2. Attitudes
3. Values To ascertain these goals before setting your
4. Interests/hobbies marketing mix, answer the following nine questions.
5. Lifestyles a) What does the business want to achieve this year?
6. Behavior b) How much money do we want to make? What profit
F. Determine how your product or service will margin do we want to achieve?
fit into your target's lifestyle. c) Where is the product life cycle and what plans are
How and when will your target use the product? What necessary to compete in this cycle?
features are most appealing to your target? What media d) Who is our target market and where do we fit into
does your target turn to for information? Does your their thinking?
target read the newspaper, search online, or attend e) What time frame have we set for achieving our
particular events? business and financial goals?
G. Evaluate your decision. f) What resources do we have to use to develop the
Once you've decided on a target market, be sure to marketing mix?
consider these questions: g) Are there any legal ramifications or requirements
related to our product or service?
1. Are there enough people who fit my criteria? h) Do we have all the required licences, patents,
2. Will my target really benefit from my trademarks and registrations for our product or
product/service? Will they see a need for it? service?
3. Do I understand what drives my target to make i) Does our product or service infringe any currently
decisions? trademarked or registered product or service? If so,
4. Can they afford my product/service?Can I reach what plans are in place to overcome this obstacle?
them with my message? Are they easily accessible? Considerations for developing your marketing mix
DEVELOPING A MARKETING MIX
Consider the following questions for each product or
Developing the right marketing mix is essential to service you offer:
business success. There are two basic steps you must
take before developing the marketing mix. The first is to 1) Target market selection/market segmentation
identify your overall goal or marketing strategy. The characteristics
second is to identify your target audience. Then you can 2) Products/programs/services offered
proceed to develop the marketing mix. 3) Distribution channels (accessibility and availability)
4) Price (including discounts, incentives and payment
What makes a good marketing mix? terms)
5) Promotions:
A typical marketing mix is based on the four Ps: a) Types of communication
A. Product – the product or service you are selling ● Techniques:
B. Price – what it will cost the customer – Advertising
C. Place – where you will sell it or how the – Publicity
customer will receive it – Public relations
D. Promotion – what communication techniques – Businesspublications– brochures, flyers
you will use to inform the public about your – direct mail
business. – personal selling
Decide your performance goals – telemarketing
– networking
Before you finalise the marketing mix for your business, – speeches
you must first specify the performance goals for your – community service.
business so that the marketing mix can help you achieve b) Every product/service, or every different market
them. you serve, should have its own marketing mix.
Marketing action plans
 Another easy method you may want to use to help You may also want to consider hiring a professional to
you develop both your marketing mix and your create your advertising campaign. Remember, though,
promotional mix is the marketing action plan, or that any campaign must be considered within the context
MAP. It is a map of what you want to achieve and of your marketing plan, with the sole purpose being to
how you plan to do it. get you more customers. You don't want an agency
creating award-winning campaigns that do not sell your
The headings below will help you develop your product or service.
MAP. Design one MAP for each goal or strategy.
Prepare a media schedule
Goal: Your goal is a non-specific statement about
what you want to achieve. Once you have your ads developed, it is advisable to
prepare a monthly, quarterly and annual media
Objective: Your objective is a very specific, action- schedule. These are the arrangements for advertising
oriented and measured statement of what you will you will make with the media. For example, you may
achieve in a certain time frame. use just newspaper advertising one month; radio the
Actions: Your actions are the tactics you will use. second and television the third. Your media schedule
will detail where the advertising will appear, when,
Leader: The leader is the person responsible. and at what cost.
You will notice that the first letters of the above Measure the effectiveness of your ads
headings also spell out "goal" – just a reminder to
keep you focused. Whatever and however you advertise, code your ads in
such a way that you can measure their effectiveness.
The promotional mix Having ads that do not bring in business is not very
effective.
The next thing to consider is the promotional mix –
the methods you will use to bring your marketing If you are running multiple ads or using more than one
mix into being. media channel at a time, you need to know which ads
are bringing in the business. This is why you have to
The promotional mix consists of four elements:
code them. If it is a coupon, put a number on it,
Advertising: This means paid media placements – relevant to that ad, to indicate the date it appeared and
the element people are most familiar with. the newspaper it appeared in. If it is a radio or
television ad, have the caller ask for a special person.
Public relations: This includes all publicity efforts.
It is sometimes thought that PR is free, but there are There are many ways to track your ads; the above are
costs in staff time, program development time, and just a couple of examples. Some of the simpler
meeting the media. methods, including cards, flyers, pamphlets and
brochures, are a very effective, inexpensive way of
Selling: This includes both face-to-face visits and advertising your product or service.
telephone sales.
Be marketing SMART
Sales promotion: This has to do with all the ways
and means to move your product or service into the Like everything else we do in business, we have to set
chosen marketplace. goals when we set about marketing. The best goals are
SMART ones:
1. Advertising
Specific: Exactly what do you want to achieve?
Advertising is paid media space – in print, on radio or
on television. The question you need to ask yourself is Measurable: How will you measure the result?
whether or not you have the money to advertise. Media
Achievable: Can you take the necessary actions to
people will tell you that if you don't advertise, you will
make it happen?
not succeed. This is not quite true. Advertising is just
one method of communicating about your business to Realistic: Don't make a wish list. You must be
the public. able to commit to it.
If you want to advertise, you need to develop a Time bound: What are your deadlines or
concurrent theme for the ads that you will place. Keep milestones?
this theme in place for a period of time to allow people
to become familiar with your offering. Effective advertising and brand management
The whole organisation must be "attuned" to its
marketing messages.
And finally:
Excite the market. It doesn't deserve to be bored by
your messages.
Be honest with yourself. Remember: if the ads aren't
working, it's nobody's fault but yours. Why? Well, if
you're getting great work from your ad agency, and
you're turning it down, that's your fault. And if you're
getting inadequate work, and you're still employing
them, then that's your fault too.
So remember this acronym:
A - Attuned
B - Be noticed
R - Recognise
I - Inconsistencies
D - Different
G - Growth
E – Excite