Chapter 4 - Engineering Management

Chapter Four – Organizing Technical Activities
Initiation:
An engineer manager needs to acquire various skills in management, including those for
organizing technical activities. In this highly competitive environment, the unskilled manager will not be
able to bring his unit, or his company, as the case may be, to success.
The opportunities offered by skillful organizing are too important for the engineer manager to
ignore. This chapter is intended to provide some background and insights in organizing.
Discussion:
I. Introduction
 Organizing is management function which refers to “the structuring of resources and
activities to accomplish objectives in an efficient and effective manner.”
 Organizing is undertaken to facilitate the implementation of plans. In effective
organizing, steps are undertaken to breakdown the total job into more manageable
man-size jobs.
 The arrangement or relationship of position within an organization is called the
structure. The result of the organizing process is the structure.
 The following are some of the useful purposes of a structure:
i. It defines the relationship between tasks and authority for individuals and
departments
ii. It defines formal reporting relationships, the number of levels in the hierarchy of
the organization, and the span of control.
iii. It defines the groupings of individuals into departments and departments into
organization.
iv. It defines the system to effect coordination of effort in both vertical (authority)
and horizontal (tasks) directions.
 When structuring an organization, an engineer manager must be concerned with the
following:
i. Division of Labor – determining the scope of work and how it is combined in a
job.
ii. Delegation of Authority – the process of assigning various degrees of decision-
making authority to subordinates.
iii. Departmentation – the grouping of related jobs, activities, or processes into
major organizational subunits.
iv. Span of Control – the number of people who report directly to a given manager.
v. Coordination – the linking of activities in the organization that serves to achieve
a common goal or objective.
II. Formal Organization

 A formal organization is “the structure that details lines of responsibilities, authority,
and position.”
 An organization chart is a planned structure that represent the deliberate attempt to
establish patterned relationships among components that will meet the objectives
effectively.
 The formal structure is described by management through:
i. Organization Chart – is a diagram of the organization’s official positions and
formal lines of authority.
ii. Organization Manual – provides written descriptions of authority relationships,
detailed the functions of major organizational units, and describes job
procedures.
iii. Policy Manual – describes personnel activities and company policies.
III. Informal Groups

 There an instance in an organization where its members spontaneously form a group
with friendship as a principal reason for belonging. This group is called an informal
group.
 Informal groups are oftentimes useful in the accomplishment of major tasks, especially
if these tasks conform with the expectations of the members of the informal group.
 According to Raymond F. Valentine, although informal groups are useful but it “is
vulnerable to expediency, manipulation, and opportunism.”
 It will be in the best interest of an engineer manager to make the informal groups to
work for the organization.
IV. Types of Organizational Structures

 Before the commencement of activities, the decision-maker in an organization will have
to decide on what structure to adapt. Depending on the size and type of operations, a
certain structural type may best fit the requirements
 Organizations may be classified into these types:
i. Functional Organization
 A form of departmentalization in which everyone engaged in one
functional activity, such as engineering or marketing, is grouped in one
unit.
 Functional organization structures are very effective in smaller firms,
especially single business firms where key activities revolve around well-
defined skills and areas of specialization.
 Advantages of Functional Organization
 The grouping of employees who perform common task permit
economies of scale and efficient resource use.
 Since the chain of command converges at the top of the
organization, decision-making is centralized, providing a unified
direction from the top.
 Communication and coordination among employees within each
department are excellent.
 The structure promotes high-quality technical problem-solving.
 The organization is provided with in depth skill specialization and
development.
 Employees are provided with career progress within functional
departments.
 Disadvantages of Functional Organization
 Communication and coordination between the department are
often poor.
 Decisions involving more than one department pile up at the top
management level and are often delayed.
 Work specialization and division of labor, which are stressed in a
functional organization, produce routine, non-motivating
employee tasks.
 It is difficult to identify which section or group is responsible for
certain problems.
 There is limited view of organizational goals by employees.
 There is limited general management training for employees.
ii. Product or Market Organization

 The product or market organization with its feature of operating by
division, is appropriate for a large corporation with may product lines in
several related industries.
 Advantages of Product or Market Organization
 The organization is flexible and responsive to change.
 The organization provides a high concern for customer’s needs.
 The organization provides excellent coordination across functional
departments.
 There is easy pinpointing of responsibility for product problems.
 There is emphasis on overall product and division goals.
 The opportunity for the development of general management
skills is provided.
 Disadvantages of Product or Market Organization
 There is a high possibility of duplication of resources across
divisions.
 There is less technical depth and specialization in divisions.
 There is poor coordination across divisions.
 There is less top management control.
 There is competition for corporate resources.
iii. Matrix Organization

 According to Thompson and Strickland, a matrix organization “is a
structure with two (or more) channels of command, two lines of budget
authority, and two sources of performance and reward.”
 Higgins declared that “the matrix structure was designed to keep
employees in a central pool and allocate them to various projects in the
firm according to the length of time they were needed.”
 Advantages of Matrix Organization
 There is more efficient use of resources than the divisional
structure.
 There is flexibility and adaptability to changing environment.
 The development of both general and functional management
skills are present.
 There is interdisciplinary cooperation and any expertise is
available to all divisions.
 There are enlarge tasks for employees which motivate them
better.
 Disadvantaged of Matrix Organization
 There is frustration and confusion from dual chain of command.
 There is high conflict between divisional and functional interests.
 There are many meetings and more discussion than action.
 There is a need for human relations training for key employees
and managers.
 There is a tendency for power dominance by one side of the
matrix.
V. Types of Authority
 Delegation of authority is a requisite for effective organizing.
 Here are the types of authority:
i. Line Authority – a manager’s right to tell subordinates what to do and then see
that they do it.
ii. Staff Authority – a staff specialist’s right to give advice to superior.
iii. Functional Authority – a specialist’s right to oversee lower level personnel
involved in that specialty, regardless of where the personnel are in the
organization.
 Line Department perform tasks that reflect the organization’s primary goal and
mission. In a construction firm, the department that negotiates and secures contracts
for the firm is a line department. The construction division is also a line function.
 Staff Departments include all those that provide specialized skills in support of line
departments. Example of staff departments include those which perform strategic
planning, labor relations, research, accounting, and personnel.
 Staff officers may be classified into the following:
i. Personal Staff – those individuals assigned to a specific manager to provide
needed staff services.
ii. Specialized Staff – those individuals providing needed staff services for the
whole organization.
 Functional Authority is one given to a person or a work group to make decisions
related to their expertise even if these decisions related to their expertise even if these
decisions concern other departments.
VI. Purpose of Committees

 A committee is a formal group of person formed for a specific purpose.
 Committees are useful specially to engineering and manufacturing firms.
 Committees may be classified as follows:
i. Ad hoc committee – a committee created for a short-term purpose and have a
limited life. An example is the committee formed to manage the anniversary
festivities of a certain firm.
ii. Standing committee – it is a relatively permanent committee that deals with
issues on an ongoing basis. An example is the grievance committee formed to
handle initially complaints from employees of the organization.

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What are the different types of organizational structures discussed?

What are the different types of authority discussed in organizing?

Chapter Four – Organizing Technical Activities

II. Formal Organization

III. Informal Groups

IV. Types of Organizational Structures

ii. Product or Market Organization

iii. Matrix Organization

VI. Purpose of Committees

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