ENGINEERING

MANAGEMENT

CHAPTER 1

THE FIELD OF ENGINEERING MANAGEMENT

-It is important to the engineer that he knows what is expected of him so that he may be
able to perform his job effectively and efficiently.
THE FUNCTION OF THE ENGINEER
-Since prehistoric times, mankind has benefited from the various tools, equipment, and
projects developed by engineers.
1. Stone bladed axe and irrigation system – 6000 to 3000 B.C.
2. Pyramids of egypt – 3000 to 600 B.C.
3. Roadbuilding by the Romans – 600 B.C.
4. Production of paper and gunpowder – 100 A.D. to 1600 A.D.
5. Production of steam engine and Spinning and weaving machinery – 1601 A.D. to 1799 A.D.
6. Manufacture of cars and household appliances – modern times.
The function of engineeniring encompass the following areas.
1. Reasearch
2. Design and development
3. Testing
4. Manufacturing
5. Construction
6. Sales
7. Consulting
8. Government
9. Teaching
10. Management
WHAT IS ENGINEERING MANAGEMENT
- Activity combining “technical knowledge with the ability to organize and coordinate
workers power,materials, and money.
THE ENGINEER IN VARIOUS TYPE
1. Level One – Minimal engineering jobs like retailing firms.
2. Level Two – A moderate degree of engineering jobs like transportation companies.
3. Level Three – A high degree of engineering jobs like construction firms.
MANAGEMENT DEFINED
-May be defined as the “Creative problem solving-process of planning, organizing,
leading, and controlling an organization’s resources to achieve its mission and objectives”.
THE PROCESS OF MANAGEMENT
1. Planning
2. Organization
3. Directing/leading
4. Controlling
HOW ONE MAY BECOME A SUCCESSFUL ENGINEER MANAGER
 -Successful engineer managers do not happen as a matter of chance, although luck is a
contributory factor.
Three general preconditions for achieving lasting success manager:
1. Ability
2. Motivation to manange
3. Opportunity

CHAPTER 2

DECISION-MAKING
-Manager of all kinds and types, including the engineer manager, are primarily tasked to
provide leadership in the quest for the organization objectives.
DECISION-MAKING AS A MANAGEMENT RESPONSIBILITY
-Decision-Making is a responsibility of the engineer manager.
WHAT IS DECISION-MAKING?
-The process of identifying and choosing alternative courses of actionin the manner
appropriate to the demands of the situation.
THE DECISION-MAKING PROCESS
1. Diagnose, problem
2. Analyze environment
3. Articulate problem or oppotunity
4. Develop viable alternatives
5. Evaluate alternatives
6. Make a choice
7. Implement decision
8. Evaluate and adopt decision results
COMPONENTS OF THE ENVIRONMENT
1. Internal Environment – Refers to organizational activities within a firm that surrounds
decision-making.
2. External Environment – Refers to variables that are outside the organization and not
typically within the short-run control of top management.
APPROACHES IN SOLVING PROBLEMS
1. Qualitative Evaluation – Refers to evaluation of alternatives using intuition and subjective
judgement.
2. Quantitative Evaluation – Refers to the evaluation of alternatives using any technique in
a group classified as rational and analytical.
QUANTITATIVE MODELS FOR DECISION-MAKING
1. Inventory models
 Economic order quantity model
  Production order quantity model
 Back order inventory model
 Quantity discount model
2. Queuing theory
3. Network models
4. Forecasting
5. Regression analysis
6. Simulation
7. Linear programming
8. Sampling theory
9. Statistical decision theory

CHAPTER 3
PLANNING TECHNICAL ACTIVITIES
-If Managing an organization is to be pursued vigorously, planning will constitute the
most important activity.
THE NATURE OF PLANNING
-A plan, which is the output of planning, provides a methodical way of achieving desired
results.
PLANNING DEFINED
-Planning, according to Nickels and others, refers to “the management function that
involves anticipating future trends and determining the best strategies and tactics to achieve
organizational objectives”.
PLANNING AT VARIOUS MANAGEMENT LEVELS
1. Top management level – Strategic planning
2. Middle management level – Intermediate planning
3. Lower management level – Operational planning
THE PLANNING PROCESS
1. Setting organizational, divisional, or unit goals.
2. Developing strategies or tactics to reach those goals.
3. Determining resources needed.
4. Setting standards.
TYPES OF PLANS
1. Functional Area Plans
 Marketing plan
 Production plan
 Financial plan
 Human resources management plan
2. Plans with Time Horizon
 Short-range plans
  Long-range plans
PLANS ACCORDING TO FREQUENCY OF USE
1. Standing plans
 Policies
 Procedures
 Rules
2. Single-use plans
 Budgets
 Programs
 Projects

CHAPTER 4

ORGANIZING TECHNICAL ACTIVITIES

-The engineer manager needs to acquire various skills in management, including those
for organizing technical activities.
REASONS FOR ORGANIZING
-Is undertaken to facilitate the implementation of plans.
ORGANIZING DEFINED
-Is a management function which refers to “the structuring of resources and activities to
accomplish objectives in a efficient and effective manner”.
THE PURPOSE OF THE STRUCTURE
Structuring an organization, the engineer manager must be concerned with the following:
1. Division of labor
2. Delegation of authority
3. Departmentation
4. Span of control
5. Coordination

THE FORMAL ORGANIZATION

-The formal organization is “the structure that details lines of responsibilities, authority,
and position”.
The formal structure is described by management through:
1. Organization chart
2. Organizational manual
3. Policy manuals
INFORMAL GROUPS
 -Are oftentimes very useful in the accomplishment of major tasks, especially if these
tasks conform with the expectations of the members of the informal group.
TYPES OF ORGANIZATIONAL STRUCTURES
1. Functional organization
2. Product or market organization
3. Matrix organization
TYPES OF AUTHORITY
1. Line Authority
2. Staff Authority
3. Functional Authority
Staffs officers may be classified into the following:
1. Personal staff
2. Specialized staff
THE PURPOSE OF COMMITTEES
-Is a formal group of persons formed for a specific purpose.
Committees may be classified as follows:
1. Ad hoc committee
2. Standing committee

CHAPTER 5

STAFFING THE ENGINEERING ORGANIZATION

-Engineering organization are very sensitive to whatever staffing errors are made.
WHAT IS STAFFING?
-Staffing may be defined as “the management function that determines human resources
needs, recruits, selects, trains, and develops human resources for jobs created by an
organization”.

THE STAFFING PROCEDURE

1. Human resource planning
 Forecasting
1. Time series methods
2. Explanatory or casual models
a) Regression models
b) Econometric models
c) Leading indicators
3. Monitoring methods
 Programming
  Evaluation and control
2. Recruitment
3. Selection
4. Induction and Orientation
5. Training and Development
6. Performance appraisal
7. Employment decisions
8. Separations
TYPES OF TESTS
1. Psychological tests
a) Aptitude test
b) Performance test
c) Personality test
d) Interest test
2. Physical examination
TRAINING PROGRAM FOR NONMANAGERS
1. On-the-job training
2. Vestibule School
3. Apprenticeship program
4. Special courses
TRAINING PROGRAMS FOR MANAGERS
1. In-basket
2. Management games
3. Case studies
The interpersonal competence of the manager may be developed through any of the following
methods:
1. Role-playing
2. Behavior modeling
3. Sensitivity training
4.
5. Transactional analysis

CHAPTER 6

COMMUNICATING
-The programming approach to the human element is different and must be dealt with
using methods espoused by behavioral scientists.
WHAT COMMUNICATION IS
-May happen between superior and subordinate, between peers, between a manager
and a client or costumer, between an employee and a government representative, etc.
FUNCTIONS OF COMMUNICATION
1. Information Function
2. Motivation Function
3. Control Function
4. Emotive Function
THE COMMUNATION PROCESS
1. Develop an Idea
2. Encode
3. Transmit
4. Receive
5. Decode
6. Accept
7. Use
8. Provide Feedback
FORMS OF COMMUNICATION
1. Verbal Communication
2. Nonverbal Communication
THE BARRIERS TO COMMUNICATION
1. Personal barriers
2. Physical barriers
3. Semantic barriers

CHAPTER 7

MOTIVATING
-Productivity has always been a serious concern of the management of firms. If it
improves, it means greater chances for the company to grow and be more stable.

WHAT IS MOTIVATION?
-Refers to the act of “giving employees reasons or incentives to work to achieve
organizational objectives”.
FACTORS CONTRIBUTING TO MOTIVATION
1. Willingness to do a job
2. Self-confidence in carrying out a task
3. Needs satisfaction
THEORIES OF MOTIVATION
1. Maslow’s needs hierarchy theory
2. Herzberg’s two-factor theory
3. Expectancy theory
4. Goal setting theory
a) Goal content
b) Goal commitment
c) Work behavior
d) Feedback aspects
TECHNIQUES OF MOTIVATIONS
1. Motivation through job design
a) Realistic job previews
b) Job rotation
c) Limited exposure
2. Motivation through rewards
a) Extrinsic
b) Intrinsic rewards
3. Motivation through employee participation
a) Setting goals
b) Making decisions
c) Solving problems
d) Designing and implementing organizational changes
4. Other motivation techniques for the diverse work force
a) Flexible work schedules
b) Family support services
c) Sabbaticals

CHAPTER 8

LEADING
-Successful firms regard the leadership skill requirement as a high priority concern.

WHAT IS LEADING?
-Is that management function which “involves influencing others to engage in the work
behaviors necessary to reach organizational goals”.
HOW LEADING INFLUENCES OTHERS
-Engineer managers are expected to maintain effective work forces.
BASES OF POWER
1. Legitimate power
2. Reward power
 3. Coercive power
4. Referent power
5. Expert power
THE NATURE OF LEADERSHIP
-May be referred to as “the process of influencing and supporting others to work
enthusiastically toward achieving objectives”.
TRAITS OF EFFECTIVE LEADERS
1. A high level of a personal drive
2. The desire to lead
3. Personal integrity
4. Self-confidence
5. Analytic ability or judgement
6. Knowledge of the company, industry or technology
7. Charisma
8. Creativity
9. Flexibility
LEADERSHIP SKILLS
1. Technical skills
2. Human skills
3. Conceptual skills

CHAPTER 9

CONTROLLING
-The long-term existence of many companies, most often, is placed in jeopardy when
some aspects of their activities go out of control.

WHAT IS CONTROLLING?
-Refers to the “process of ascertaining whether organizational objectives have been achieved, if
not, why not, and determining what activities should then be taken to achieve objectives better
in the future”.
IMPORTANCE OF CONTROLLING
-The importance of controlling may be illustrated as it is applied in a typical factory.
ESTABLISHING PERFORMANCE OBJECTIVES AND STANDARDS
1. Sales targets
2. Production targets
 3. Worker attendance
4. Safety record
5. Supplies used
MEASURING ACTUAL PERFORMANCE
-There is a need to measure actual performance so that when shortcomings occur,
adjustments could be made.
COMPARING ACTUAL PERFORMANCE TO OBJECTIVES AND STANDARDS
-Once actual performance has been determined, this will be compared with what the
organization seeks to achieve.
TAKING NECESSARY ACTION
1. Hire additional personnel
2. Use more equipment
3. Require overtime
TYPES OF CONTROL
1. Feedforward control
2. Concurrent control
3. Feedback control
COMPONENTS OF ORGANIZATIONAL CONTROL SYSTEM
1. Strategic plan
2. The long-range financial plan
3. The operating budget
4. Performance appraisals
5. Statistical reports
6. Policies and procedures

CHAPTER 10

MANAGING PRODUCTION AND SERVICE OPERATIONS

-Organizations are designed mainly to produce products or services.
WHAT OPERATION IS
-Refers to “any process that accepts inputs and uses resources to change those inputs
in useful ways”.
EXAMPLES:
1. Industrial chemicals
2. Services
3. Electrical products
 4. Electronic products
5. Mechanical devices
WHAT OPERATION MANAGEMENT IS
-Operations is an activity that needs to be managed by competent persons.
OPERATIONS AND THE ENGINEER MANAGER
-The engineer manager is expected to produce some output at whatever magement
level he is.
TYPES OF TRANSFORMATION PROCESS
1. Manufacturing processes
a) Job shop
b) Batch flow
c) Worker-paced line flow
d) Machine-paced line flow
e) Batch/continuous flow hybrid
f) Continuous flow
2. Service processes
a) Service factory
b) Service shop
c) Mass service
d) Professional service
IMPORTANT PARTS OF PRODUCTIVE SYSTEMS
1. Product design
2. Production planning and scheduling
3. Purchasing and materials management
4. Inventory control
5. Work flow layout
6. Quality control

CHAPTER 11
MANAGING THE MARKETING FUNCTION
-Engineer manager are engaged in the production of tangible or intangible goods.
WHAT IS THE MARKETING CONCEPT?
-The marketing concept states that the engineer must try to satisfy the needs of his
clients by means of a set of coordinated activities.
THE ENGINEER AND THE FOUR P’S OF MARKETING
1. The product
2. The price
3. The place
4. The promotion
STRATEGIC MARKETING FOR ENGINEERS
1. Selecting a target market
2. Developing a marketing mix

CHAPTER 12

MANAGE THE FINANCE FUNCTION

-The engineer manager must understand that the finance function is a very important
management concern.
WHAT THE FINANCE FUNCTION IS
-Is an important management responsibility that deals with the “procurement and
administration of funds with the view of achieving the objectives of business”.
THE DETERMINATION OF FUND REQUIREMENTS
1. To finance daily operations
2. To finance the firm’s credit services
3. To finance the purchase of inventory
4. To finance the purchase of major assets
THE BEST SOURCE OF FINANCING
1. Flexibility
2. Risk
3. Income
4. Control
5. Timing
6. Other factors like collateral values, flotation costs, speed, and exposure.

INDICATORS OF FINANCIAL HEALTH

1. Balance sheet
2. Income statement
3. Statement of changes in financial positions.
RISK DEFINED
-Refers to the uncertainly concerning loss or injury.
1. fire
2. theft
3. floods
4. accidents
5. nonpayment of bills by customers
6. disability and death
7. damage claim from other parties.
TYPES OF RISK
-Risk may be classified as either pure or speculative.
WHAT IS RISK MANAGEMENT
-Is “an organized strategy for protecting and conserving assets and people”.
METHODS OF DEALING WITH RISK
1. The risk may be avoided
2. The risk may be retained
3. The hazard may be reduced
4. The losses may be reduced
5. The risk may be shifted