Umbay CEE 108 - SIM Rev 0

UNIVERSITY OF MINDANAO
College of Engineering Education

Mechanical Engineering Program
Physically Distanced but Academically Engaged
Self-Instructional Manual (SIM) for Self-Directed Learning

(SDL)
Course/Subject: CEE 108 – Engineering Management
Name of Teacher: Engr. Angelie L. Umbay
THIS SIM/SDL MANUAL IS A DRAFT VERSION ONLY; NOT

FOR REPRODUCTION AND DISTRIBUTION OUTSIDE OF ITS
INTENDED USE. THIS IS INTENDED ONLY FOR THE USE OF
THE STUDENTS WHO ARE OFFICIALLY ENROLLED IN THE
COURSE/SUBJECT.
EXPECT REVISIONS OF THE MANUAL.
2nd Floor, B&E Building
Matina Campus, Davao City
Telefax: (082) 296-1084
Phone No.: (082)300-5456/300-0647 Local 131
Table of Contents
Course Outline: CEE 108 – ENGINEERING MANAGEMENT ........................................................ 5
Course Coordinator: Engr. Angelie L. Umbay ....................................................................... 5
Big Picture in Focus: ULO-a. to recall and apply the functions of engineer and various types of
organization management skills required at various levels........................................................... 7
Metalanguage ............................................................................................................................ 7
Essential Knowledge ................................................................................................................. 8
Self-Help: ................................................................................................................................. 11
Let’s Check .............................................................................................................................. 12
Let’s Analyze ............................................................................................................................ 12
In a Nutshell ............................................................................................................................. 17
Q&A List ................................................................................................................................... 17
Keywords Index ....................................................................................................................... 19
Big Picture in Focus: ULO-b. to identify some models and styles of behavioral decision-making.
..................................................................................................................................................... 20
Metalanguage .......................................................................................................................... 20
Essential Knowledge ............................................................................................................... 21
Self-Help: ................................................................................................................................. 24
Let’s Check .............................................................................................................................. 25
Let’s Analyze ............................................................................................................................ 29
In a Nutshell ............................................................................................................................. 29
Q&A List ................................................................................................................................... 29
Keywords Index ....................................................................................................................... 31
Big Picture in Focus: ULO-a. to describe the contents of planning process and types of plans 32
Metalanguage .......................................................................................................................... 32
Self-Help: ................................................................................................................................. 35
Let’s Check .............................................................................................................................. 36
Let’s Analyze ............................................................................................................................ 37
In a Nutshell ............................................................................................................................. 38
Q&A List ................................................................................................................................... 38
Keywords Index ....................................................................................................................... 38
Big Picture in Focus: ULO-b. to demonstrate the concept of organizing and explain the
meaning, advantages and disadvantages of formal and informal organization......................... 40
Metalanguage .......................................................................................................................... 40
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Self-Help: ................................................................................................................................. 44
Let’s Check .............................................................................................................................. 45
Let’s Analyze ............................................................................................................................ 43
In a Nutshell ............................................................................................................................. 44
Q&A List ................................................................................................................................... 44
Keywords Index ....................................................................................................................... 45
Big Picture in Focus: ULO-a. to understand the value of change and develop skills to lead
successfully. ................................................................................................................................ 46
Metalanguage......................................................................................................................... 46
Let’s Check .............................................................................................................................. 50
Let’s Analyze .......................................................................................................................... 52
In a Nutshell............................................................................................................................ 53
Q&A List ................................................................................................................................... 55
Keywords Index ....................................................................................................................... 56
Big Picture in Focus: ULO-b. to explain the objectives of control and describe the controlling
process. ....................................................................................................................................... 56
Metalanguage .......................................................................................................................... 57
Self-Help: ................................................................................................................................. 61
Let’s Check .............................................................................................................................. 62
Let’s Analyze .......................................................................................................................... 63
In a Nutshell............................................................................................................................ 64
Q&A List ................................................................................................................................... 66
Keywords Index ....................................................................................................................... 67
Big Picture in Focus: ULO-c. To acknowledge the ideas about how engineering managers
manage the product and service operation ................................................................................ 67
Metalanguage .......................................................................................................................... 67
Let’s Check .............................................................................................................................. 78
Self-Help: ................................................................................................................................. 80
Let’s Analyze ........................................................................................................................... 80
In a Nutshell ............................................................................................................................. 81
Q&A List ................................................................................................................................... 82
Keywords Index ....................................................................................................................... 84
Big Picture in Focus: ULO-d. To demonstrate a comprehensive understanding about how
should engineering managers manage the marketing function ................................................. 84
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Metalanguage .......................................................................................................................... 84
Self-Help: ................................................................................................................................. 91
Let’s Check .............................................................................................................................. 92
In a Nutshell ............................................................................................................................. 93
Q&A List ................................................................................................................................... 94
Big Picture in Focus: ULO-e to show a comprehensive understanding about how should
engineering managers manage the finance function ................................................................. 96
Metalanguage .......................................................................................................................... 96
Self-Help: ............................................................................................................................... 104
Let’s Check ............................................................................................................................ 105
Let’s Analyze .......................................................................................................................... 105
In a Nutshell ........................................................................................................................... 106
Q&A List ................................................................................................................................. 106
Keywords Index ..................................................................................................................... 107
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Course Outline: CEE 108 – ENGINEERING MANAGEMENT
Course Coordinator: Engr. Angelie L. Umbay

Email: [email protected]
Student Consultation: Done by online (LMS) or through text, emails or

calls
Mobile: 09484212305
Phone: (082) 327 9676
Effectivity Date: August 2020
Mode of Delivery: Blended (On-Line with face to face or virtual

sessions)
Time Frame: 54 Hours

Student Workload: Expected Self-Directed Learning
Pre-requisite: None
Co-requisite: NONE
Credit: 3
Attendance Requirements: A minimum of 95% attendance is required at all
scheduled Virtual or face to face sessions.
Course Outline Policy
Areas of Concern Details

Contact and Non-contact Hours This 3-unit course self-instructional manual is designed
for blended learning mode of instructional delivery with
scheduled face to face or virtual sessions. The
expected number of hours will be 90 including the face
to face or virtual sessions. The face to face sessions
shall include the summative assessment tasks (exams)
since this course is crucial in the licensure examination
for engineering.
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Assessment Task Submission Submission of assessment tasks shall be on 3rd, 5th, 7th ,
and 9th week of the term. The assessment paper shall
be attached with a cover page indicating the title of the
assessment task (if the task is performance), the
name of the course coordinator, date of submission and
name of the student. The document should be emailed
to the course coordinator. It is also expected that he
learner already paid the tuition and other fees before
the submission of the assessment task.
If the assessment task is done in real time through the

features in the Blackboard Learning Management
System, the schedule shall be arranged ahead of time
by the course coordinator.
Since this course is included in the licensure examination

for engineering, the learner will be required to take the
Multiple- Choice Question exam inside the University.
This should be scheduled ahead of time by the course
coordinator. This is non-negotiable for all licensure-
based programs.
Turnitin Submission (if necessary) To ensure honesty and authenticity, all assessment
tasks are required to be submitted through Turnitin
with a maximum similarity index of 30% allowed. This
means that if the paper goes beyond 30%, the
learner will either opt to redo the paper or explain in
writing addressed to the course coordinator the
reasons for the similarity. In addition, if the paper has
reached more than 30% similarity index, the learner
may be called for a disciplinary action in accordance
with the University’s OPM on Intellectual and Academic
Honesty.
Please note that academic dishonesty such as cheating

and commissioning others to complete the task for the
learner will result to severe punishments (reprimand,
warning, expulsion).
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Penalties for Late The score for an assessment item submitted after the
Assignments/Assessments designated time on the due date, without an approved
extension of time, will be reduced by 5% of the possible
maximum score for that assessment item for each day
or part day that the assessment item is late.
However, if the late submission of assessment paper

has a valid reason, a letter of explanation should be
submitted and approved by the course coordinator. If
necessary, you will also be required to present/attach
evidences.
Return of Assignments/ Assessment tasks will be returned to you two (2) weeks
Assessments after the submission. This will be returned by email or
via Blackboard portal.
For group assessment tasks, the course coordinator will

require some or few of the students for online or virtual
sessions to ask clarificatory questions to validate the
originality of the assessment task submitted and to
ensure that all the group members are involved.
Assignment Resubmission The learner should request in writing addressed to the

course coordinator of the intention to resubmit an
assessment task. The resubmission is premised on the
student’s failure to comply with the similarity index and
other reasonable grounds such as academic literacy
standards or other reasonable circumstances e.g.
illness, accidents, financial constraints.
Re-marking of Assessment Papers The learner should request in writing addressed to the
and Appeal program coordinator your intention to appeal or contest
the score given to an assessment task. The letter should
explicitly explain the reasons/points to contest the grade.
The program coordinator shall communicate with the
students on the approval and disapproval of the request.
If disapproved by the course coordinator, the learner can

elevate your case to the program head or the dean with
the original letter of request. The final decision will come
from the dean of the college.
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Grading System All culled from BlackBoard sessions and traditional

contact
Course discussions/exercises – 30%
1st formative assessment – 10%
2nd formative assessment – 10%
3rd formative assessment – 10%
All culled from on-campus/onsite sessions (TBA):

Final exam – 40%
Submission of the final grades shall follow the usual

University system and procedures.
Referencing Style IEEE format
Student Communication You are required to create a umindanao email account

which is a requirement to access the BlackBoard
portal. Then, the course coordinator shall enroll the
students to have access to the materials and resources
of the course. All communication formats: chat,
submission of assessment tasks, requests etc. shall be
through the portal and other university recognized
platforms.
You can also meet the course coordinator in person

through the scheduled face to face sessions to raise
your issues and concerns.
For students who have not created their student email,

please contact the course coordinator or program head.
Contact Details of the Dean Dr. Charlito L. Cañesares

Email: [email protected]
Phone: (082) 2273166 or 3050647 loc. 102
Contact Details of the Program Dr. Cresencio P. Genobiagon Jr.
Head Email: [email protected]
Phone: (082) 2273166 or 3050647 loc. 102
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Students with Special Needs Students with special needs shall communicate with the
course coordinator about the nature of his or her
special needs. Depending on the nature of the need,
the course coordinator with the approval of the program
coordinator may provide alternative assessment tasks
or extension of the deadline of submission of
assessment tasks. However, the alternative
assessment tasks should still be in the service of
achieving the desired course learning outcomes.
Online Tutorial Registration Your course coordinator will endorse you to the tutorial
or enhancement program offered by the Mechanical
Engineering Program namely Brachistrochrone online
tutorial Project. The coordinator of this tutorial club will
provide schedule of tutorial outside of your class
schedule. You will attend the tutorial sessions and take
the pre and post test to determine your progress.
Please register for the tutorial at this google form:
https://bit.ly/2X4grrR
Help Desk Contact
CEE Help Desk:
Frida Santa O. Dagatan
Email:[email protected]
Mobile: 09562082442
Phone: (082)227-2902
CEE BLACKBOARD Administrator Jetron J. Adtoon

[email protected]
09055267834
Library Contact Ms. Christina Perocho
0991022141
[email protected]
GSTC GSTC:
Ronadora E. Deala, RPsy, RPm, RGC, LPT
[email protected]
09513766681
Silvino P. Josol
[email protected]
09060757721
Course Information – see/download course syllabus in the Black Board LMS
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CC’s Voice: Hello prospective engineer! Welcome to this course CEE 108: Engineering
Management. By now, I am confident that you really wanted to become
an engineer and that you have visualized yourself already working
at an industry, inventing, researching or like your ment or, i n
front of a classroom teaching.
CO CO 1. Identify and discuss the fundamentals of engineering

management.
CO 2. Describe the elements involves in solving an engineering problem

by the means of engineering management theories.
Let us begin!
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Big Picture
Week 1-3: Unit Learning Outcomes (ULO): At the end of the unit, you are expected
to
a. to recall and apply the functions of engineer and various types of

organization management skills required at various levels.
b. To identify some models and styles of behavioral decision-making.
Big Picture in Focus: ULO-1a. to recall and apply the functions of

engineer and various types of organization
management skills required at various levels.
Metalanguage
In this section, the most essential terms relevant to the study of the functions of
an engineer and to demonstrate ULO-a will be operational defined to establish a common
frame of reference as to how the texts work in your chosen field or career. You will
encounter these terms as we go through the study of the functions of an engineer. Please
refer to these definitions in case you will encounter difficulty in understanding terms.
1. Management. It is the process of dealing with or controlling things or people.

2. Teaching. It refers to the occupation, profession, or work of a teacher.
3. Government. Refers to the governing body of a nation, state, or community.
4. Consulting. It is the business of giving expert advice to other professionals,
typically in financial and business
5. Sales. It refers to the exchange of a commodity for money; the action of selling
something.
6. Construction. It is the building of something, typically a large structure.
7. Manufacturing. Is the making of articles on a large-scale using machinery;
industrial production.
8. Testing. It is taking measures to check the quality, performance, or reliability of
(something), especially before putting it into widespread use or practice.
9. Design and Development. It refers to the purpose, planning, or intention that
exists or is thought to exist behind an action, fact, or material object.
10. Research. It is the systematic investigation into and study of materials and
sources in order to establish facts and reach new conclusions.
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Please proceed immediately to the “Essential Knowledge” part since the

first lesson is also definition of essential terms.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the first three
(3) weeks of the course, you need to review essential principle in engineering
management necessary that will be laid down in the succeeding pages. Please
note that you are not limited to exclusively refer to these resources. Thus, you are
expected to utilize other books, research articles and other resources that are
available in the university’s library e.g. ebrary, search.proquest.com etc.
Introduction to Engineering Management

The Functions of the Engineer
Specifically, the functions of engineering encompass the following areas.
Research. Where the engineer is engaged in the process of learning about nature and
codifying this knowledge into usable theories.
Design and Development. Where the engineer undertakes the activity of turning a
product concept to a finished physical item.
Testing. Where the engineer works in a unit where new products or parts are tested for
workability.
Manufacturing. Where the engineer is directly in charge of production personnel or

assumes responsibility for the product.
Construction. This is where the construction engineer (a civil engineer) is either directly
in charge of the construction personnel or may have responsibility for the quality of the
construction process.
Sales. Where the engineer assists the company’s customers to meet their needs,
especially those that require technical expertise.
Consulting. Where the engineer works as consultant of any individual or organization

requiring his services.
Government. Where the engineer may find employment in the government performing
any of the various tasks in regulating, monitoring, and controlling the activities of
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various institutions, public or private.
Teaching. Where the engineer gets employment in a school and is assigned as a

teacher of engineering courses.
Management. Where the engineer is assigned to manage groups of people performing

specific task.
The Engineer in Various Types of Organization

Form the viewpoint of the engineer, organizations may be classified according to the
degree of engineering jobs performed:
1. Level One- those with minimal engineering jobs like retailing firms.
2. Level Two- those with a moderate degree of engineering jobs like transportation
companies.
3. Level Three- those with a high degree of engineering jobs like construction firms.
What is Engineering Management?

Engineering management refers to the activity combining” technical knowledge with the
ability to organize and coordinate worker power, materials, materials, and money.”
The top position an engineer manager may hope to occupy is the general managership
or presidency of any form, large or small. As he scales the management ladder, he finds
that the higher he goes up, the less technical activities he performs, and the more
management tasks he accepts.
Management Defined
Management may be defined as the “creating problem solving-process of planning,
organizing, leading, and controlling an organization’s resources to achieve its mission
and objectives.”
The Process of Management

Management is a process consisting of planning, organizing, directing (or leading), and
controlling.
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Explained in a simple manner, management must seek to find out the objectives of the
organization, think of ways on how to achieve them, decide on the ways to be adapted
and the material resources to be used.
Requirements for the Engineer Manager’s Job

Depending on the type of products or services a firm produces, the engineer manager
must have the following qualifications;
1. A bachelor’s degree in engineering form a reputable school.
2. A few years’ experience in a pure engineering job.
3. Training in supervisions;
4. Special training in engineering management.
How one may become a successful Engineer Manager

Kreitner indicates at least three general preconditions for achieving lasting success as
a manager. They are as follows.
1. Ability
2. Motivation to manage, and
3. Opportunity
Ability. Managerial ability refers to the capacity of an engineer manager to achieve

organizational objectives effectively and efficiently.
Motivation to Manage. Many people have the desire to work and finish specific tasks
assigned by supervisors, but not many are motivated to manage other people so that
they may contribute to the realization of the organization’s objectives.
A management researcher, John B. Miller, developed a psychometric instrument to
measure objectively an individual’s motivation to manage. The test is anchored to the
following dimensions.
1. Favorable attitude toward those in positions of authority, such as superiors.
2. Desire to engage in games or sports competition with peers.
3. Desire to engage in occupational or work-related competition with peers.
4. Desire to assert oneself and take charge.
5. Desire to exercise power and authority over others.
6. Desire to behave in distinctive way, which includes standing out form the crowd.
7. Sense or responsibility in carrying out the routine duties associated with
managerial work.
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Self-Help:
You can also refer to the sources below to help you further understand the lesson:
*Medina R. G. (1977). Engineering Management. Philippines: Rex Book Store
*Robbins S. and Coulter M. (2012). Management. Mason, NJ: Pearson
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Let’s
Check
Activity 1. Now that you know the most essential terms in the study of functions of
engineer. Let us try to check your understanding of these terms. In the space provided,
write the term/s being asked in the following statements:
____________ 1. This refers to those with minimal engineering jobs like retailing firms.
_____________2. This is where the engineer is assigned to manage groups of people
performing specific task.
_____________3. This is where the engineer assists the company’s customers to meet
their needs, especially those that require technical expertise.
_____________4. This is where the engineer works as consultant of any individual or
organization requiring his services.
_____________5. This refers to those with a moderate degree of engineering jobs like
transportation companies.
_____________6. This is where the engineer gets employment in a school and is
assigned as a teacher of engineering courses.
_____________7. This is where the engineer works in a unit where new products or
parts are tested for workability.
_____________8. This refers to those with a high degree of engineering jobs like
construction firms.
_____________9. This is where the engineer is directly in charge of production
personnel or assumes responsibility for the product.
_____________10. This is where the engineer is engaged in the process of learning
about nature and codifying this knowledge into usable theories.
Let’s
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Analyze
Problem 1: What are the functions of an Engineer? Describe each function.
Problem 2: According to a management researcher, John B. Miller developed a

psychometric instrument to measure objectively an individual’s motivation to manage.
What are the are dimensions where the test is anchored?
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In a Nutshell
In this chapter, simple yet proven analysis, procedures, and technologies have been
described to improve the functions of an Engineer. According to Kreitner, he indicates
that there are at least three general preconditions for achieving lasting success as a
manager. What are those? Explain.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
________
Q&A List
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In this section, list down all emerging questions or issues. These questions may be
raised in the LMS or other modes. You can write the answers after clarification.
Do you have any question for clarification?
Questions/ Issues Answers
1.
2.
3.
4.
5.
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Keywords Index
This section includes concepts (a word or phrase), ideas, theories, names of people,
and other vital terms to remember.
Construction Ability Engineer Manager

Management
Teaching Manufacturing Motivation Planning
Government Testing Management Organization
Consulting Design and Responsibility Leading

Development
Sales Research Training Control
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Big Picture in Focus: ULO-1b. to identify some models and styles of

behavioral decision-making.
Metalanguage
For you to demonstrate ULO-b, you will need to have an operational

understanding of the following principles below. Please note that you will also be
required to refer to the previous principles found in ULO-a section.
1. Quantitative. This is relating to, measuring, or measured by the quantity of

something rather than its quality.
2. Qualitative. This is relating to, measuring, or measured by the quality of
something rather than its quantity.
3. Process. It is a series of actions or steps taken in order to achieve an end.
4. Alternatives. It is one of two or more available possibilities.
5. Evaluate. Form an idea of the amount, number, or value of; assess.
6. Choice. It is an act of selecting or deciding when faced with two or more
possibilities.
7. Decision. It refers to a conclusion or resolution reached after consideration.
8. Feedback. It refers to an information about reactions to a product, a person's
performance of a task, etc. which is used as a basis for improvement.
9. Control. It is the power to influence or direct people's behavior or the course of
events.
10. Models. It is a system or thing used as an example to follow or imitate.
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Essential Knowledge
Decision Making Process

Decision making may be defined as “the process of identifying and choosing alternative
course of action in a manner appropriate to the demands of the situation”
Step 1: Identifying a Problem

If a manager wants to make an intelligent decision, his first move must be to identify the
problem. If the manager fails in this aspect, it is almost impossible to succeed in the
subsequent steps.
What is a Problem?
A problem exists when there is a difference between an actual situation and a desired
situation.
Step 2: Analyze Environment

The environment where the organization is situated plays a very significant role in the
success or failure of such an organization. It is, therefore, very important that an
analysis of the environment be undertaken.
Step 3: Articulate problem or opportunity

The internal environment refers to organizational activities within a firm that surrounds
decision-making.
The external environment refers to variables that are outside the organization and not
typically within the short-run control of top management.
Step 4: Develop viable alternatives

The fourth step on the decision-making process requires the decision to list viable
alternatives that could resolve the problem. In this step, a decision maker needs to be
creative. And alternatives are only listed, not evaluated just yet.
Step 5: Evaluate alternatives
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After determining the viability of the alternatives and a revised list has been made, an
evaluation of the remaining alternatives is necessary. Proper evaluation makes
choosing the right solution less difficult.
Step 6: Make a choice

Choice-making refers to the process of selecting among alternatives representing
potential solutions to a problem.
Step 7: Implement decision

Implementation refers to carrying out the decision so that the objectives sought will be
achieved.
Step 8: Evaluate and adapt decision results

It is important for the manager to use control and feedback mechanism to ensure results
and to provide information for future decisions.
Feedback refers to the process which requires checking at each stage of the process ro
assure that the alternatives generated, the criteria used in evaluation, and the solution
selected for implementation are in keeping with the goals and objectives originally
specified.
Control refers to action made to ensure that activities performed match the desired
activities or goals, that have been set.
Approaches in Solving Problems

In decision-making, the engineer manager is faced with problems which may either be
simple or complex. To provide with some guide, he must be familiar with the following
approaches:
1. Qualitative Evaluation
This term refers to evaluation of alternatives using intuition and subjective
judgment.
2. Quantitative Evaluation
This term refers to the evaluation of alternatives using any techniques in a group
classified as rational and analytical.
Quantitative Models for Decision Making
The types of quantitative techniques which may be useful in decision-making are as
follows:
1. Inventory Models
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Inventory model consists of several types all designed to help the engineer
manager make decisions regarding inventory. They are as follows:
• Economic order quantity model
• Production order quantity model
• Back order inventory model
• Quantity discount model
2. Queuing Theory
The queuing theory is one that describes how to determine the number of service
units that will minimize both customers waiting time and cost of service.
3. Network Models
These are models where large complex task is broken int smaller segments that
can be managed independently.
4. Forecasting
Forecasting may be defined as “the collection of past and current information to
make prediction about the future”
5. Regression Analysis
The regression model is a forecasting method that examines the association
between two or more variables.
6. Simulation
Simulation is a model constructed to represent reality, on which conclusions
about real-life problems can be used.
7. Linear Programming
It is used to produce an optimum solution within the bounds imposed by
constraints upon the decision.
8. Sampling theory
Samples or population are statistically determined to be used for a number of
processes, such as quality control and marketing research.
9. Statistical Decision theory
Refers to the “rational way to conceptualize, analyze, and solve problems in
situations involving limited, or partial information about the decision environment.
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Self-Help:
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Let’s
Check
Activity 1. Now that you know the most essential terms in the study of decision
making. Let us try to check your understanding of these terms. In the space provided,
write the term/s being asked in the following statements:
______________1. This exists when there is a difference between an actual situation

and a desired situation.
______________2. This refers to the process which requires checking at each stage of
the process to assure that the alternatives generated, the criteria used in evaluation, and
the solution selected for implementation are in keeping with the goals and objectives
originally specified.
______________3. This refers to action made to ensure that activities performed match
the desired activities or goals, that have been set.
______________4. This term refers to evaluation of alternatives using intuition and
subjective judgment.
______________5. This quantitative model refers to the model constructed to represent
reality, on which conclusions about real-life problems can be used.
______________6. This quantitative model is defined as “the collection of past and
current information to make prediction about the future”
______________7. This term refers to the evaluation of alternatives using any
techniques in a group classified as rational and analytical.
______________8. This quantitative model is a forecasting method that examines the
association between two or more variables.
______________9. This quantitative model is one that describes how to determine the
number of service units that will minimize both customers waiting time and cost of
service.
______________10. This quantitative model is used to produce an optimum solution
within the bounds imposed by constraints upon the decision.
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Let’s
Analyze
Problem 1: Decision making may be defined as “the process of identifying and choosing
alternative course of action in a manner appropriate to the demands of the situation.”
What are the eight decision making process? Describe each process.
In a Nutshell
In this chapter, simple yet proven analysis, procedures, and technologies have
been described to improve quantitative models for decision making. What are the types
of quantitative techniques which may be useful in decision-making ? Explain each type.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
________________________________________________________________
Q&A List
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1.
2.
3.
4.
5.
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Keywords Index
Choice Problem Control

Quantitative
Qualitative Decision Articulate Qualitative Evaluation
Process Feedback Alternative Quantitative Evaluation
Alternatives Control Choice Theory
Evaluate Models Feedback Quantitative Models
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Big Picture
Week 4-6: Unit Learning Outcomes (ULO): At the end of the unit, you are expected
to
a. to describe the contents of planning process and types of plans

b. to demonstrate the concept of organizing and explain the meaning,
advantages and disadvantages of formal and informal organization.
Big Picture in Focus: ULO-2a. to describe the contents of planning

process and types of plans
Metalanguage
In this section, the most essential terms relevant to the study of planning and to
demonstrate ULO-a will be operational defined to establish a common frame of reference
as to how the texts work in your chosen field or career. You will encounter these terms
as we go through the study of the planning. Please refer to these definitions in case you
will encounter difficulty in understanding terms.
1. Strategic. It is relating to the identification of long-term or overall aims and

interests and the means of achieving them.
2. Intermediate. It having or suitable for a level of knowledge or skill between basic
and advanced.
3. Operational. It is relating to the routine functioning and activities of a business or
organization.
4. Process. It refers to a systematic series of mechanized or chemical operations
that are performed in order to produce or manufacture something.
5. Plans. It refers to a detailed proposal for doing or achieving something.
6. Time Horizon. Refers to a largely dictated by investment goals and strategies
7. Frequency. The rate at which something occurs or is repeated over a period or in
a given sample.
8. Short-range. It refers to a short period of future time.
9. Long-range. Relating to a period that extends far into the future.
10. Management. It refers to the process of dealing with or controlling things or

people.
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Please proceed immediately to the “Essential Knowledge” part since the

first lesson is also definition of essential terms.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the six (6)
weeks of the course, you need to review essential fundamentals and principles of
algebra, trigonometry geometry and differentiation. Please note that the learner
should not limited to exclusively refer to these resources. Thus, the learner is
expected to utilize other books, research articles and other resources that are
available in the university’s library e.g. ebrary, search.proquest.com etc.
Planning Technical Activities

Planning
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
Strategic Planning. The process of determining the major goals of the organization and
the policies and strategies for obtaining and using resources to achieve those goals.
Intermediate Planning. The process of determining the contributions that subunits can
make with allocated resources.
Operational Planning. The process of determining how specific tasks can be
accomplished on time with available resources.
The Planning Process

1. Setting organizational, Divisional or Unit Goal.
Goal may be defined as the “precise statement of results sought quantified in time
and magnitude, where possible.
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2. Developing strategies or tactics to reach those goals

A strategy may be defined as “a course of action aimed at ensuring that the
organization will achieve its objectives”.
3. Determining resources needed
To satisfy strategic requirements, a general statement of needed resources will
suffice.
4. Setting Standards
A standard may be defined as “a quantitative or qualitative measuring device
designed to help monitor the performances of people, capital goods, or processes.
Type of Plans
Plans are of different types. They may be classified in terms of functional areas, time
horizon, and frequency of use.
Functional Area Plan
1. Marketing Plan
This is the written document or blueprint for implementing and controlling an
organization’ marketing activities.
2. Production Plan
It is the written document that states the quantity of output a company must
produce in broad terms and by product family.
3. Financial Plan
It is a document that summarizes the current financial situation of the firm,
analyzes financial needs, and recommends a direction for financial activities.
4. Human Resource management Plan
It is a document indicates the human resource needs of a company detailed in
terms of quantity and quality.
Plans with Time Horizon

Plans with the time horizon consists of the following:
1. Short -range plans. These are plans intended to cover a period less than one
year.
2. Long -range plans. These are plans to cover a time span or more than one year.
Plans According to Frequency of Use
According to frequency of use, plans may be classified as:
1. Standing Plans.
These are plans that re used again and again, and they focus on managerial
situation that recur repeatedly.
Standing plans may be further classified as follows:

1. Policies – they are broad guidelines to aid managers at every level in making
decisions about recurring situations or function.
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2. Procedures - they are plans that describes the exact series of actions to be
taken in a given situation
3. Rules – they are statements that either require or forbid a certain action.
2. Single-Use Plans
These plans are specifically developed to implement courses of action that are
relatively unique and are unique and are unlikely to be repeated.
Single-use plans may be further classified as follows:
1. Budget
according to Weston and Brigham, is “a plan which sets forth the projected
expenditure for a certain activity and explains where required funds will come
from.
2. Programs
is a single -use plan designed to coordinate a large set of activities.
3. Projects
a single-use plan that is usually more limited in scope than a program and is
sometimes prepared to support a program.
Self-Help:
*Robbins S. and Coulter M. (2012). Management. Mason, NJ: Pearso
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Let’s Check
Activity 1. Now that you know the most essential terms in the study of planning. Let us
try to check your understanding of these terms. In the space provided, write the term/s
being asked in the following statements:
______________1. Single-use plans. is a single -use plan designed to coordinate a

large set of activities.
______________2. This process of determining the contributions that subunits can
make with allocated resources.
______________3. This functional area plan refers to the written document that states
the quantity of output a company must produce in broad terms and by product family.
______________4. The process of determining how specific tasks can be accomplished
on time with available resources.
______________5. This functional area plan refers to a document that summarizes the
current financial situation of the firm, analyzes financial needs, and recommends a
direction for financial activities.
______________6. It refers to the process of determining the major goals of the
organization and the policies and strategies for obtaining and using resources to achieve
those goals.
______________7. This single-use plan is “a plan which sets forth the projected
expenditure for a certain activity and explains where required funds will come from.
______________8. This single-use plan is a single-use plan that is usually more limited
in scope than a program and is sometimes prepared to support a program.
______________ 9. This functional area plan refers to the written document or blueprint
for implementing and controlling an organization’ marketing activities.
______________10. This functional area plan refers to a document indicates the human
resource needs of a company detailed in terms of quantity and quality.
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Let’s Analyze
Problem 1: What are the single use plans according to the frequency of use?
Problem 2: 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”. What are the four planning process?
Describe each process.
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In a Nutshell
described to improve the functional area of plan. Plans are of different types. They may
be classified in terms of functional areas, time horizon, and frequency of use. What are
the different types of functional area plan? Describe each type.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
________
Q&A List
1.
2.
3.
4.
5.
Keywords Index
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Time Horizon Top Procedure

Strategic
Intermediate Frequency Middle Rule
Operational Short Range Lower Marketing Plan
Process Long Range Operational Production Plan
Plans Management Policies Financial Plan
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Big Picture in Focus: ULO-2b. to demonstrate the concept of

organizing and explain the meaning, advantages and disadvantages
of formal and informal organization.
Metalanguage
For you to demonstrate ULO-b, you will need to have an operational

understanding of the following principles below. Please note that you will also be
required to refer to the previous principles found in ULO-a section.
1. Organizing. It refers to an arrange into a structured whole or order.

2. Informal Groups. It is the interlocking social structure that governs how people
work together in practice.
3. Structures. It constructs or arrange according to a plan; give a pattern or
organization to.
4. Matrix. It refers to an organizational structure in which two or more lines of
command, responsibility, or communication may run through the same individual.
5. Authority. It refers the power to influence others, especially because of one's
commanding manner or one's recognized knowledge about something.
6. Line. It is the oldest and simplest method of administrative organization.
7. Staff. It supports the organization with specialized advisory and support functions
8. Functional It is a common type of organizational structure in which
the organization is divided into smaller groups based on
specialized functional areas, such as IT, finance, or marketing.
9. Advantages. It is a condition or circumstance that puts one in a favorable or
superior position.
10. Disadvantages. It is an unfavorable circumstance or condition that reduces the
chances of success or effectiveness.
Essential Knowledge
ORGANIZING
Organizing is a management function which refers to “the structuring of resources and
activities to accomplish objectives in an efficient and effective manner.”
The Purpose of the Structure

The structure serves some very useful purposes. They are the following.
1. It defines the relationship between tasks and authority for individuals and
departments.
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2. It defines formal reporting relationships, the number of levels in the hierarchy of

the organization, and the span of control.
3. It defines the groupings of individuals into departments and organization.
4. It defines the system to effect coordination of effort in both vertical (authority) and
horizontal (tasks) directions.
When structuring an organization, the engineer manager must be concerned with the
following:
1. Division of labor
Determining the scope or work and how it is combined in a job.
2. Delegation of Authority
The process of assigning various degrees of decision-making authority to
subordinates.
3. Departmentation
The grouping of related jobs, activities, or processes into major organizational
subunits.
4. Span of Control
The number of people who report directly to a given manager.
5. Coordination
The linking of activities in the organization that serves to achieve a common goal
or objective.
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. Organization Manual
3. Policy Manuals
The organizational chart is a diagram of the organization’s official positions and formal
lines of authority.
Informal Groups
There are instances when members of an organization spontaneously form a group
with friendship as a principal reason for belonging.
Types of Organizational Structures

Organizations may be classified intro three types. They are the following:
1. Functional Organization
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This is form of departmentalization in which everyone engaged in one functional

activity, such as engineering or marketing, is grouped into one unit.
2. Product or market organization
This refers to the organization of a company by divisions that brings together all
those involved with a certain type of product or customer.
3. Matrix Organization
An organizational structure in which each employee reports to both a functional or
division manager and to a project or group manager.
Functional Organization
Functional organizations have certain advantages. They are the following:
1. The grouping of employees who perform a common task permit economies of
scale and efficient resources use.
2. Since the chain of command converges at the top of the organization, decision-
making is centralized, providing a unified direction from the top.
3. Communication and coordination among employees within each department are
excellent.
4. The structure promotes high-quality technical problem-solving.
5. The organization is provided with in depth skill specialization and development.
6. Employees are provided with career progress within functional departments.
The disadvantages of the functional organization are the following:

1. Communication and coordination between the departments are often poor.
2. Decisions involving more than one department pile up at the top management
level and are often delayed.
3. Work specialization and division of labor, which are stressed in a functional
organization, produce routine, nonmotivating employee tasks.
4. It is difficult to identify which section or group is responsible for certain problems.
5. There is limited view of organizational goals by employees.
6. There is limited general management training for employees.
Product or Market Organization

The advantages of a product or market organization are as follows:
1. The organization is flexible and responsive to change.
2. The organization provides a high concern for customer’s needs.
3. The organization provides excellent coordination across functional departments.
4. There is easy pinpointing of responsibility for product problems
5. There is emphasis on overall product and division goals.
6. The opportunity for the development of general management skills is provided.
The disadvantages of the product or market organization are as follows:
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1. There is a high possibility of duplication of resources across divisions.

2. There is less technical depth and specialization in divisions.
3. There is poor coordination across divisions.
4. There is less top management control.
5. There is competition for corporate resources.
Matrix Organization
The matrix organization is afforded with the following advantages:
1. There is more efficient of resources than the divisional structure.
2. There is flexibility and adaptability to changing environment.
3. The development of both general and functional management skills is present.
4. There is interdisciplinary cooperation and any expertise is available to all
divisions.
5. There are enlarged tasks for employees which motivate them better.
The matrix organization has some disadvantages, however. They are the following:
1. There is frustration and confusion from dual chain of command.
2. There is high conflict between divisional and functional interest.
3. There are many meetings and more discussion than action.
4. There is a need for human relations training for key employees and managers.
5. There is a tendency for power dominance by one side of the matrix.
Types of Authority
The delegation of authority is a requisite for effective organizing. It consists of three
types. They are as follows:
1. Line Authority. A manager’s right to tell subordinates what to do and then see that
they do it.
2. Staff Authority. A staff specialist’s right to give advice to a superior.
3. Functional Authority. A specialist’s right to oversee lower level personnel involved
in that specialty, regardless of where the personnel are in the organization.
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Self-Help:

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Let’s Check
Activity 1. Now that you know the most essential terms in the study of organizing. Let
us try to check your understanding of these terms. In the space provided, write the
term/s being asked in the following statements:
____________1. This refers to the number of people who report directly to a given
manager.
____________2. This refers to a staff specialist’s right to give advice to a superior.
____________3. This refers to a management function which refers to “the structuring
of resources and activities to accomplish objectives in an efficient and effective manner.”
____________4. This is a process of assigning various degrees of decision-making
authority to subordinates.
____________5. This is a manager’s right to tell subordinates what to do and then see
that they do it.
____________6. This refers to determining the scope or work and how it is combined in
a job.
____________7. This refers to the linking of activities in the organization that serves to
achieve a common goal or objective.
____________8. This refers to the grouping of related jobs, activities, or processes into
major organizational subunits
____________9. It is an organizational structure in which each employee reports to both
a functional or division manager and to a project or group manager.
____________10. It is a specialist’s right to oversee lower level personnel involved in
that specialty, regardless of where the personnel are in the organization.
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Let’s Analyze
Problem 1: What are the purpose of the structures in organizing?
Problem 2: What are the advantages and disadvantage of functional organizations?
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In a Nutshell
described to improve matrix organization. What are the advantage and disadvantage of
matrix organization?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________
Q&A List
In this section, list down all emerging questions or issues. These questions may be raised
in the LMS or other modes. You can write the answers after clarification.
1.
2.
3.
4.
5.
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Keywords Index
This section includes concepts (a word or phrase), ideas, theories, names of people, and
other vital terms to remember.
Line Division of Labor Organizational Chart

Organizing
Informal Groups Staff Delegation of Authority Organizational Manual
Structures Functional Departmentation Policy Manuals
Matrix Advantage Span of Control Matrix
Authority Disadvantage Coordination Functional

Organization
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Big Picture
Week 7-9: Unit Learning Outcomes (ULO): At the end of the unit, you are expected to
a. to understand the value of change and develop skills to lead successfully.

b. to explain the objectives of control and describe the controlling process.
c. To acknowledge the ideas about how engineering managers, manage the product and service
operation
d. To demonstrate a comprehensive understanding about how should engineering managers manage
the marketing function
e. To show a comprehensive understanding about how should engineering managers manage the
finance function
Big Picture in Focus: ULO-3a. to understand the value of change and

develop skills to lead successfully.
Metalanguage
In this section, the most essential terms relevant to the study of leading and to demonstrate
ULO-a will be operational defined to establish a common frame of reference as to how the texts
work in your chosen field or career. You will encounter these terms as we go through the study of
the leading Please refer to these definitions in case you will encounter difficulty in understanding
terms.
1. Leading. Refers to a guidance or leadership, especially in a spiritual context.

2. Leaders. It is the person who leads or commands a group, organization, or country.
3. Power. It refers to the ability to do something or act in a way, especially as a faculty or quality.
4. Leadership. It is the action of leading a group of people or an organization.
5. Traits. It refers to a distinguishing quality or characteristic, typically one belonging to a
person.
6. Skills. It is the ability to do something well; expertise.
7. Charisma. - compelling attractiveness or charm that can inspire devotion in others.

8. Contingency. It is a future event or circumstance which is possible but cannot be predicted
with certainty.
9. Autocratic Leaders. Also known as authoritarian leadership.
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10. Free-Rein Leaders. Also called Laissez-Faire.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for nine (9) weeks of the
course, you need to review essential principle in engineering managements necessary that will be
laid down in the succeeding pages. Please note that you are not limited to exclusively refer
to these resources. Thus, you are expected to utilize other books, research articles and other
resources that are available in the university’s library e.g. ebrary, search.proquest.com etc.
Leading
What is Leading?
Leading is that management function which “involves influencing others to engage in the work
behaviors necessary to reach organizational goals.
How Leaders Influence Others

Base of Power
The power possessed by leaders may be classified according to various bases. They are as follows:
1. Legitimate Power
A person who occupies a higher position has legitimate power over persons in lower
positions within the organization.
2. Reward Power
When a person has the ability to give rewards to anybody who follows orders or request,
the is said to have reward power.
3. Coercive Power
When a person compels another to comply with orders through threats or punishment, he is
said to coercive power.
4. Referent Power
When a person can get compliance from another because the latter would want to be
identified with the former, that person is said to have referent power.
5. Expert Power
Experts provide specialized information regarding their specific lines of expertise.
The Nature of Leadership
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Leadership may be referred to as “the process of influencing and supporting others to work
enthusiastically toward achieving objectives.”
Traits of Effective Leaders

There are certain leadership traits identified by researchers and which may be useful in developing
effective leaders. These traits are as follows:
1. Personal Drive
Persons with drive are those identified as willing to accept responsibility, possess vigor,
initiative, persistence, and health.
2. The Desire to Lead

There are some persons who have all the qualifications for leadership.
3. Personal Integrity
A person who is well-regarded by others as one who has integrity possesses one trait of a
leader.
4. Self Confidence
The activities of leaders require moves that will produce the needed outputs.
5. Analytical Ability
Leaders are, oftentimes, faced with difficulties that prevent the completion of assigned
tasks.
6. Knowledge of the Company, Industrial or Technology

A leader who is well-informed about his company, the industry where the company belongs,
and the technology utilized by the industry, will be in a better position to provide directions
to his unit.
7. Charisma
When a person has sufficient personal magnetism that leads people to follow his directives,
this person is said to have charisma.
8. Creativity
Ronnie Millevo defines creativity as “the ability to combine existing data, experience, and
preconditions from various sources in such a way.
9. Flexibility
People differ in the way they do their work. One will adapt a different method from another
person’s method.
Leadership Skills
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Leaders need to have various skills to be effective. They are:

1. Technical Skills
These are skills a leader must possess to enable him to understand and make decisions
about processes, activities, and technology.
2. Human Skills
These skills refer to the ability of a leader to deal with people, both inside and outside the
organization.
3. Conceptual Skills
These skills refer to “the ability to think in abstract terms, to see how parts fit together to
form the whole”.
Way Leaders Uses Power

Leadership styles also vary according to how power is used. They are as follows:
1. Autocratic Leaders
Leaders who make decisions themselves, without consulting subordinates are called
autocratic leaders.
2. Participative Leaders
When a leader openly invites his subordinates to participate or share in decisions, policy
making and operation methods, he is said to be a participative leader.
3. Free-Rein Leaders
Leaders who set objectives and allow employees or subordinates relative freedom to do
whatever it takes to accomplish these objectives, are called free-rein leaders.
Leaders Orientation Toward Task and People

Leaders may be classified according to how they view tasks and people. Consequently, a leader
may either be:
1. Employee Orientation
A leader is said to be employee oriented when he considers employees as human beings
of “intrinsic importance and with individual and personal need” to satisfy.
2. Task Orientation
A leader is said to be task-oriented if he places stress on production and the technical
aspects of the job and the employees are viewed as the means of getting the work done.
Contingency Approaches to Leadership Style

The contingency approach is “an effort to determine through research which managerial practices
and techniques are appropriate in specific. The various contingency approaches are as follows:
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1. Fiedler’s Contingency Model

According to Fred Fiedler, “leadership is effective when the leader’s style is appropriate to
the situation. “The situational characteristics is determined by three principal factors:
• The relations between leaders and followers
• The structure of the task
• The power inherent in the leader’s position
2. Hersey and Blanchard’s Situational Leadership Model

The situational leadership model developed by Hersey and Blanchard suggests that the
most important factor affecting the selection of a leader’s style is the development (or
maturity) level of subordinate. The leader should match his or her style to this maturity
level.
Majority has two components:

• job skills and knowledge
• psychological maturity
3. Path-Goal Model of Leadership

By using the path-goal model, it is assumed that effective leaders can enhance subordinate
motivation by:
• Clarifying the subordinate’s perception of work goals,
• Linking meaningful rewards with goal attainment
• Explaining how goals and desired rewards can be achieved.
4. Vroom’s Decision-Making Model

Vroom’s model of leadership is one that prescribes the proper leadership style for various
situations, focusing on the appropriate degrees of delegation of decision-making authority.
Let’s Check
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Activity 1. Now that you know the most essential terms in the study of leading. Let us try to check
your understanding of these terms. In the space provided, write the term/s being asked in the
following statements:
_________1. One of the traits of effective leaders on which a person who is well-regarded by others
as one who has integrity possesses one trait of a leader.
_________2. This refers to a person who occupies a higher position has legitimate power over
persons in lower positions within the organization.
_________3. One of the traits of effective leaders on which a person with drive are those identified
as willing to accept responsibility, possess vigor, initiative, persistence, and health.
_________4. This is when a person can get compliance from another because the latter would want
to be identified with the former, that person is said to have referent power.
_________5. Refers to a management function which “involves influencing others to engage in the
work behaviors necessary to reach organizational goals.
_________6. One of the traits of effective leaders on which the leaders are, oftentimes, faced with
difficulties that prevent the completion of assigned tasks.
_________7. This is when a person has the ability to give rewards to anybody who follows orders or
request, the is said to have reward power.
_________8. One of the traits of effective leaders on which there are some persons who have all
the qualifications for leadership.
_________9. This is when a person compels another to comply with orders through threats or
punishment, he is said to coercive power.
_________10. This is where the experts provide specialized information regarding their specific lines
of expertise.
Self-Help:

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Let’s Analyze
Answer the following questions.
1. What is leading? Why is it important to the engineer manager?
2. How do leaders influence others?
3. Why is it important for a leader to have “the desire to lead”? What happens if the said desire is
not present?
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4. What are free-rein leaders?
5. What leadership styles may be used by path-goal proponents?
In a Nutshell
Activity 1. Engineer managers should be equipped with good leadership skills. Leading, as a
management function, involves influencing others to engage in the work behaviors necessary to
reach the organization’s goal. Leaders should have technical, human, and conceptual skills to be
effective. For this activity, you need to identify an engineer of your choice and describe his/her
leadership style. Are there important changes that have to be made in his/her style? What are those?
List down the suggested character change applicable.
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Q&A List
In this section, list down all emerging questions or issues. These questions may be raised in the
LMS or other modes. You can write the answers after clarification.
1.
2.
3.
4.
5.
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Keywords Index
This section includes concepts (a word or phrase), ideas, theories, names of people, and other
vital terms to remember.
Leading Contingency Reward Power Personal Integrity
Charisma Autocratic Leaders Coercive Power Self Confidence
Power Leaders Referent Power Analytical Ability
Leadership Free-Rein Leaders Expert Power Creativity
Traits Legitimate Power Personal Drive Flexibility
Big Picture in Focus: ULO-3b. to explain the objectives of control and

describe the controlling process.
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Metalanguage
For you to demonstrate ULO-b, you will need to have an operational understanding of the
following principles below. Please note that you will also be required to refer to the previous principles
found in ULO-a section.
1. Control. Defined as having a means of measurement and initiating adjustments in the

course of an activity to address unwanted changes to cost, schedule, quality, or risk elements
that have influenced the activity.
2. Objectives. It refers to a thing aimed at or sought.
3. Feedforward. It is an element or pathway within a control system that passes a controlling
signal from a source in its external environment to a load elsewhere in its external
environment.
4. Concurrent. It takes place while an activity is in progress. It involves the regulation of
ongoing activities that are part of transformation process.
5. Feedback Control. It refers to a process that managers can use to evaluate how effectively
their teams meet the stated goals at the end of a production process
6. Appraisals. It is an expert estimate of the value of something.
7. Statistical. Relating to the use of statistics.
8. Inadequate. Define as lack of the quality or quantity required.
9. Revenues. It refers to an income, especially when of a company or organization and of a
substantial nature.
10. Profit. It is a financial gain, especially the difference between the amount earned and the
amount spent in buying, operating, or producing something.
Please proceed immediately to the “Essential Knowledge” part since the first lesson
is also definition of essential terms.
Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes) for the nine (9) weeks of the
course, you need to review essential principle in machine elements 2 necessary that will be laid
down in the succeeding pages. Please note that you are not limited to exclusively refer to
these resources. Thus, you are expected to utilize other books, research articles and other
Controlling
What is Controlling?
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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 tio achieve objectives
better in the future.”
Importance of Controlling
When controlling is properly implemented, it will help the organization achieve its goal in the most
efficient and effective manner possible.
Deviations, mistakes, and shortcomings happen inevitably. When they occur in the daily operations,
they contribute to unnecessary expenditures which increase the cost of producing goods and
services.
Steps in the Control Process

The control process consists of four steps, namely:
1. Establishing performance objectives and standards
2. Measuring actual performance
3. Comparing actual performance to objectives and standards
4. Taking necessary action based on the results of the comparisons.
Establishing Performance Objectives and Standards

In controlling, what has to be achieved must first be determined. Examples of such objectives and
standards are as follows:
1. Sales targets – which are expressed in quantity or monetary terms
2. Production targets- which are expressed in quantity or quality
3. Worker attendance – which are expressed in terms of rate of absences
4. Safety Record – which is expressed in number of accidents for given periods
5. Supplies used- which are expressed in quantity or monetary terms for given periods
Measuring Actual Performance
There is a need to measure actual performance so that when shortcomings occur, adjustments could
be made. The adjustments will depend on the actual findings.
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
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The purpose of comparing actual performance with the desired result is to provide management with
the opportunity to take corrective action when necessary.
Types of Control
Control consists of three distinct types, namely:
1. Feedforward control
2. Concurrent control
3. Feedback control
Feedforward Control. When management anticipates problems and prevents their occurrence, the
type of control measure undertaken is called feedforward control.
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.
Feedback Control. When information is gathered about a completed activity, and in order that
evaluation and steps for improvement are derived, feedback control is undertaken.
Components of Organizational Control Systems

Organizational control system consists of the following:
1. Strategic plan
2. The long-range financial plan
3. The operating budget
4. Performance appraisals
5. Statistical reports
6. Policies and procedures
Strategic Plans
It provides the basic control mechanism for the organization. When there are indicators that activities
do not facilitate the accomplishment of strategic goals, these activities are either set aside, modified
or expanded.
The Long-Range Financial Plan

The panning horizon differs from company to company. Most firms will be satisfied with one year.
Engineering firms, however, will require longer term financial plans.
The Operating Budget

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An operating budget indicates the expenditures, revenues, or profits planned for some future period
regarding operations.
Performance Appraisals
Performance appraisal measures employee performance. As such, it provides employees with a
guide on how to do their jobs better in the future.
Statistical Reports
Statistical reports pertain to those that contain data on various developments within the firm. Among
information which may be found in a statistical report pertains to the following:
1. Labor efficiency rates
2. Quality control rejects
3. Accounts receivable
4. Accounts payable
5. Sales reports
6. Accident reports
7. Power consumption report
Strategic Control Systems

To be able to assure the accomplishment of the strategic objectives of the company, strategic control
systems become necessary. These systems consist of the following:
1. Financial analysis
2. Financial ratio analysis
Financial Analysis
The success of most organizations depends heavily on its financial performance. It is just fitting that
certain measurements of financial performance be made so that whatever deviations from standards
are found out, corrective actions may be introduced.
Financial Ratio Analysis

Financial ratio analysis is a more elaborate approach used in controlling activities. Under this
method, one account appearing in the financial statement is paired with another to constitute a ratio.
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Identifying Control Problems

Recognizing the need for control is one thing, implementing it is another. When operations become
complex, the engineer manager must consider useful steps in controlling. Kreutner mentions three
approaches:
1. Executive reality check
2. Comprehensive internal audit
3. General checklist of symptoms of inadequate control
Executive reality check

Employees at the frontline often complain that management imposes certain requirements that are
not realistic.
Comprehensive internal audit

An internal audit is one undertaken to determine the efficiency and effectivity of the activities of an
organization. Among the many aspects of operations within the organization, a small activity that is
not done right may continue to be unnoticed until it snowballs into a full-blown problem.
Symptoms of Inadequate Control

If a comprehensive internal audit cannot be availed of for some reason, the use of a checklist for
symptoms of inadequate control may be used.
Kreitner has listed some of the common symptoms as follows:
1. An unexplained decline in revenues and profits.
2. A degradation of service (customer complaints)
3. Employee dissatisfaction (complaints, grievances, turnover).
4. Cash shortages caused by bloated inventories or delinquent accounts receivable.
5. Idle facilities or personnel
6. Disorganized operations (workflow bottlenecks, excessive paperwork).
7. Excessive costs.
8. Evidence of waste and inefficiency (scrap, rework).
Self-Help:

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Let’s Check
Activity 1. Now that you know the most essential terms in the study of controlling. Let us try to check
your understanding of these terms. In the space provided, write the term/s being asked in the
following statements:
__________1. An example of such objectives and standards in which are expressed in quantity or
monetary terms for given periods.
__________2. An example of such objectives and standards in which is expressed in number of
accidents for given periods
__________3. This is when information is gathered about a completed activity, and in order that
evaluation and steps for improvement are derived, feedback control is undertaken
__________4. This 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.”
__________5. An example of such objectives and standards in which are expressed in terms of
rate of absences
__________6. It refers to a more elaborate approach used in controlling activities.
quality
__________8. This is when operations are already ongoing and activities to detect variances are
made, concurrent control is said to be undertaken.
monetary terms
__________10. This is when management anticipates problems and prevents their occurrence, the
type of control measure undertaken is called feedforward control.
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Let’s Analyze
1. Why is controlling a very important management function?
2. What is controlling? Is it applicable to the day-to-day activities of the engineer manager?
3. Compare and contrast the three distinct types of control
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4. What are policies? In what ways do their facilitate control?
5. Do you consider “idle facilities or personnel” as a symptom of inadequate control? Why or why
not?
In a Nutshell
Activity 1. Controlling is one of the main functions of management which next to planning,
directing, and organizing. It so important because it complements the other functions of
management. Controlling is aimed at determining whether objectives were realized or not, and if
not, by providing means for achievement. For this activity, list down the control activities that may
be useful to any of the following:
a. the installation of a powerplant
b. the manufacture of a microchip
c. the manufacture of tricycle
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Q&A List
1.
2.
3.
4.
5.
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Keywords Index
Control Appraisals Strategic Plan Feedforward Control
Objectives Statistical Policies and Concurrent Control

Procedures
Feedforward Inadequate Statistical Reports Feedback Control
Concurrent Revenues Performance Safety Record

Appraisals
Feedback Control Profit The Operating Budget Supplies Used
Big Picture in Focus: ULO-3c. To acknowledge the ideas about how

engineering managers manage the product and service operation
Metalanguage
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For you to demonstrate ULO-c, you will need to have an operational understanding of the
following principles below. Please note that you will also be required to refer to the previous
principles.
1. Operation. Operations refer to any process that accepts inputs and uses resources to change
those inputs in useful ways.
2. Efficiency. Efficiency is related to “the cost of doing something, or the resource utilization
involved
3. Effectiveness. Effectiveness refers to goal accomplishment.
4. Manufacturing. Manufacturing processes are those that refer to the making of products by
hand or with machinery.
5. Job shop. A job shop is one whose production is based on sales orders for a variety of small
lots.
6. Batch Flow. The batch flow process is where lots of generally own designed products are
manufactured. It is further characterized by the following:
7. Assembly line. An assembly line refers to a production layout arranged in a sequence to
accommodate the processing of large volumes of standardizing products or services.
8. Machine-Paced Assembly Line. This type of production process produces mostly standard
products with machines playing a significant role.
9. Continuous Flow. The continuous flow processing is characterized by - “the rapid rate at
which items move through the system
10. Product Design. Product design refers to the process of creating a set of products
specifications appropriate to the demands of the situation.
is also definition of essential terms.
Essential Knowledge
course, you need to review essential principle in machine elements 2 necessary that will be laid
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down in the succeeding pages. Please note that you are not limited to exclusively refer to
these resources. Thus, you are expected to utilize other books, research articles and other
MANAGING PRODUCTION AND SERVICE OPERATIONS
Organizations are designed mainly to produce products or services. If these organizations

must survive and grow, the operations function must be undertaken in the most economical manner
possible.
OPERATION
Operations refer to any process that accepts inputs and uses resources to change those
inputs in useful ways.
Examples of final goods and services are as follows:
1. Industrial chemicals like methylene chloride, borax powder, phosphoric acid, etc., which are
produced by chemical manufacturing firms;
2. Services like those for the construction of ports, high-rise buildings, roads, bridges, etc.,
which are produced by constructions firms;
3. Electrical products like transformers, circuit breakers, switch gears, power capacitors, etc.,
which are produced by electrical manufacturing firms;
4. Electronic products like oscilloscope, microwave tests systems, transistors, cable testers,
etc., which are produced by electronics manufacturing firms;
5. Mechanical devices like forklifts, trucks, loaders, etc., which are produced by manufacturing
firms.
6. Engineering consultancy services like those for construction management and supervision,
project management services, etc., which are produced by engineering consultancy firms.
OPERATION MANAGEMENT
Operations is an activity that needs to be managed by competent persons. Aldag and Stearns
accurately defined operations management as “the process of planning, organizing, and controlling
operations to reach objectives efficiently and effectively.“ As the terms “planning”, “organizing”, and
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‘controlling’ have already been discussed in the previous section, elaborations on the terms
“efficiency“ and “effectiveness' will be made.
Efficiency is related to “the cost of doing something, or the resource utilization involved."
When a person performs a job at a lesser cost than when another person performs the same job, he
is more efficient than the other person.
Effectiveness refers to goal accomplishment. When one is able to reach his objectives, say
produce 10,000 units in one month, he is said to be effective.
Operations management must be performed in coordination with the other functions like
those for marketing and finance. Although the specific activities of the operations divisions of firms
slightly differ from one another, the basic function remains the same, i.e., to produce products or
services.
OPERATIONS AND THE ENGINEER MANAGER
The engineer manager is expected to produce some output at whatever management level
he is. If he is assigned as the manufacturing engineer, his function is to determine and define the
equipment, tools, and processes required to convert the design of the desired product into reality in
an efficient manner.
The engineer in charge of operations in a construction firm is responsible for the actual
construction of whatever bridge or road his company has agreed to put up. He is required to do it
using the least expensive and the easiest methods.
The engineer, as operations manager, must find ways to contribute to the production of
quality goods or services and the reduction of costs in his department.
The typical operations manager is one with several years of experience in the operations
division and possesses an academic background in engineering.
TYPES OF TRANSFORMATION PROCESS
The engineer manager must have some knowledge of the various types of the transformation
process. They are as follows:
1. Manufacturing processes
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a) job shop
b) batch flow
c) worker-paced line flow
d) machine-paced line flow
e) batch/continuous flow hybrid
f) continuous flow ‘E
2. Service processes
a) service factory
b) service shop
c) mass service
d) professional service
MANUFACTURING PROCESSES
Manufacturing processes are those that refer to the making of products by hand or with
machinery.
Jab Shop. A job shop is one whose production is based on sales orders for a variety of small
lots. Job shops are very useful components of the entire production effort since they manufacture
products in small lots that are needed by but cannot be produced economically by many companies.
Depending upon the customer's needs, a job shop may produce a lot consisting of 20 to 200 or more
similar parts.
Job shops produce custom products, in general. Products may be manufactured within a
short notice. The equipment used is of the general-purpose type.
The type of layout used by job shops in the process layout, where similar machines are
grouped. The typical size of the operation is generally small. Job shops are labor-intensive, and
machines are frequently idle. Figure 10.4 shows a process flow diagram for a job shop.
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Batch Flow. The batch flow process is where lots of generally own designed products are
manufactured. It is further characterized by the following:
1. There is flexibility to produce either low or high volumes.
2. Not all procedures are performed on all products.
3. The type of equipment used is mostly for general purposes.
4. The process layout is used.
5. The operation is labor-intensive, although there is less machine idleness.
6. The size of the operation is generally medium-sized.
Examples of factories using the large batch flow a winery, scrap-metal reduction plants, and
road-repair contractors.
Worker-Paced Assembly Line. An assembly line refers to a production layout arranged in

a sequence to accommodate the processing of large volumes of standardizing products or services.
The quality and quantity of output in a worker-paced assembly line depend to a great extent
to the skill of the labor utilized. Examples of worker-paced assembly lines are food marts like
McDonald's and Shakeys.
The worker-paced assembly line is characterized by the following:
1. The products manufactured are mostly standardized.

2. There is a clear process pattern.
3. Specialized equipment is used.
4. The size of the operation is variable.
5. The process is worker-paced.
6. The type of layout used is line flow.
7. Labor is still a big cost item.
Machine-Paced Assembly Line. This type of production process produces mostly standard
products with machines playing a significant role. Among its other features are as follows:
1. The process is of a clear, rigid pattern.

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2. A Specialized type of equipment is used.

3. The line flow layout is used.
4. Capital equipment is a bigger cost item than labor.
5. The operation is large.
6. The process is machine-paced.
Examples of the machine-paced assembly line are automobile manufacturers like General
Motors and Ford Motors
Continuous Flow. The continuous flow processing is characterized by -“the rapid rate at
which items move through the system. This processing method is very appropriate for producing
highly standardized products like calculators, typewriters, automobiles, televisions, cellular phones,
etc.
Its other characteristics are as follows:
1. There is an economy of scale in production, resulting in a low per-unit cost of production.

2. The process is clear and very rigid.
3. Specialized equipment is used.
4. The line flow layout is used.
5. Operations are highly capital intensive.
6. The size of operations is very large.
7. Processing is fast.
Batch / Continuous Flow Hybrid. This method of processing is a combination of the batch
and the continuous flow. Two distinct layouts are used, one for batch and one for the continuous
flow. The typical size of the operation is also very large giving opportunities for economies of scale.
Examples of companies using the batch/continuous flow hybrid are breweries, gelatin
producers, and tobacco manufacturers.
Service Processes
Service processes are those that refer to the provision of services to persons by hand or with
machinery.
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Service Factory. A service factory offers a limited mix of services which results in some
economies of scale in operations. This also affords the company to compete in terms of price and
speed of producing the service.
The process layout preferred by the service factory is the rigid pattern of line flow processing.
McDonald's and Shakeys are also examples of service factories.
Service Shop. A service shop provides a diverse mix of services. The layout used are those
for job shops or fixed positions and are adaptable to various requirements.
Service shops abound throughout the Philippines. Examples are Servitek and Megashell.
Among the services provided by these shops are car engine tune-up, wheel balancing, wheel
alignment, change oil, etc.
Mass Service. A mass service company provides services to a large number of people
simultaneously. A unique processing method is, therefore, necessary to satisfy this requirement. To
be able to serve many people, mass service companies offer a limited mix of services.
The process layout used is typically fixed position where customers move through the layout.
Professional Services. These are companies that provide specialized services to other
firms or individuals. Examples of such firms are as follows:
1. Engineering or management consulting services which help in improving the plant layout or
the efficiency of a company.
2. Design services that supply designs for a physical plant, products, and promotion materials.
3. Advertising agencies which help promote a firm's products.
4. Accounting services.
5. Legal services.
6. Data processing services.
7. Health services.
Professional service firms 0fi'er a diverse mix of services. There is a lower utilization of capital
equipment compared to the service factory and the service shop. The process pattern used is very
loose. The process layout used is identical to the job shop.
Professional service firms are, oftentimes, faced with delivery problems brought about by
nonuniform demand. Strategies that may be used "depending on the situation are as follows:
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1. The use of staggered work-shift schedules.

2. The hiring of part-time staff.
3. Providing the customer with the opportunity to select the level of service.
4. Installing auxiliary capacity or hiring subcontractors.
5. Using multiskilled floating staff.
6. Installing customer self-service.
IMPORTANT PARTS OF PRODUCTIVE SYSTEMS
Productive systems consist of six important activities as follows:
1. product design
2. production planning and scheduling
3. purchasing and materials management
4. inventory control
5. work flow layout
6. quality control
Product Design
Customers expect that the products they buy would perform according to assigned functions.
A good product design assures that this will be so. Customers avoid buying products with poor
product design. An example is a certain brand of ball pen which fails to write after one or two days
of actual use. This happens because of poor product design.
Product design refers to the process of creating a set of products specifications appropriate
to the demands of the situation.
Companies wanting to maintain or improve their market share keeps a product design team
composed of engineers, manufacturing, and marketing specialists.
Production Planning and Scheduling
Production planning may be defined as “forecasting the future sales of a given product,
translating this forecast into the demand it generates for various production facilities and arranging
for the procurement of these facilities."
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Production planning is a very important activity because it helps management to make

decisions regarding capacity. When the right decisions are made, there will be fewer opportunities
for wastages.
Scheduling is the “phase of production control involved in developing timetables that specify
how long each operation in the production process takes. “Efficient scheduling assures the
optimization of the use of human and nonhuman resources.
Purchasing and Materials Management
Firms need to purchase supplies and materials required in the various production activities.
The management of purchasing and materials must be undertaken with a high degree of efficiency
and effectiveness especially in firms engaged in high volume production. The wider variety of
supplies and materials needed adds to the necessity of properly managing and purchasing of
materials.
Materials management refers to “the approach that seeks efficiency of operation through the
integration of all material acquisition, movement, and storage activities in the firm.
Inventory Control
Inventory control is the process of establishing and maintaining appropriate levels of reserve
stocks of goods. “As supplies and materials are required by firms in the production process, these
must be kept available when they are needed. ‘Ibo 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 production activities are hampered. A
balance between the two extremes must be determined.
There are ways of achieving proper inventory control. They 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
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The 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.
The job of the operations manager is to assure that a cost-effective work-flow layout is
installed. A good workflow layout will have the following benefits:
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 costs.
7. Minimize variation in types of material-handling equipment.
8. Facilitate the manufacturing (or service) process.
9. Facilitate the organizational structure.
Quality Control
Quality control refers to the measurement of products or services against standards set by
the company. Certain standard requirements are maintained by the management to facilitate
production and to keep customers satisfied.
Poor quality control breeds customer complaints, returned merchandise, expensive lawsuits,
and huge promotional expenditures.
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Let’s Check
Activity 1. You need to research the transformation process of an existing company. Site some part
on the transformation process where improvements in the flow could be introduced.
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Self-Help:

Let’s Analyze
1. What do you mean by” operation”? Does this term cover production of farm product?
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2. What are the types of transformation process? In what way are they similar and different?
3. What is the batch flow process?
4. What are the important parts of productive system?
5. What types of services are offered by professional service firms? What production problems do
these firms encounter?
In a Nutshell
You’ve already known how essential to know about how engineering mangers manage the
product and service operation. Also, it tackles the different organizational units of a company. This
time, I will provide you my perspective, and you continue the remaining.
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1. Management of operation is very difficult for new and survival firms.

2. The function of the operations manager is to plan, organize, and control operations to achieve
objectives efficiently, and effectively the engineer manager is, oftentimes, assigned to perform
the tasks of the operations manager.
Q&A List

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1.
2.
3.
4.
5.
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Keywords Index

Procedures

Appraisals
Big Picture in Focus: ULO-3d. To demonstrate a comprehensive

understanding about how should engineering managers manage the
marketing function
Metalanguage
For you to demonstrate ULO(d), you will need to have an operational understanding of the
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following principles below.
1. Marketing. Marketing is a group of activities designed to facilitate and expedite the selling of
goods and services.
2. Product. The term “product” includes the tangible (or intangible) item and its capacity to satisfy
a specific need.
3. Price. Price refers to “the money or other considerations exchanged for the purchase or use
of the product, idea, or service.”
4. Place. It is very important for companies to locate in places where they can be easily reached
by their customers.
5. Promotion. Promotion as “communicating information between the seller and potential buyer
to influence attitudes and behavior.”
6. Advertising. Advertising defines advertising as a paid message that appears in the mass
media to inform or persuade people about particular products, services, beliefs, or actions.
is also a definition of essential terms.
Essential Knowledge
course, you need to review essential principles in machine elements 2 necessaries that will be
to these resources. Thus, you are expected to utilize other books, research articles, and other
resources that are available in the university’s library e.g. ebrary, search.proquest.com, etc.
Managing the Marketing Function
Engineer managers are engaged in the production of tangible or intangible goods. Some of
these engineer managers are directly responsible for marketing the company's products or services.
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If he is promoted as a general manager, both the production and marketing functions become his
overall concern.
At whatever management level the engineer manager 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 must convince his boss to continuously rely on him regarding the
staff services he provides.
If the foregoing statements are true, the engineer manager has a marketing problem. He
needs to understand certain concepts related to the marketing discipline.
WHAT IS THE MARKETING CONCEPT?
Marketing is a group of activities designed to facilitate and expedite the selling of goods and
services. The marketing concept states that the engineer must try to satisfy the needs of his clients
utilizing a set of coordinated activities. When clients are satisfied with what the company offers, they
continually provide business.
THE ENGINEER AND THE FOUR P’S OF MARKETING
The engineering organization will be able to meet the requirements of its clients (or
customers) depending on how it uses the four P's of marketing which-are as follows:
1. the product (or service)

2. the price
3. the place, and
4. the promotion.
The Product
In the marketing sense, the term “product” includes the tangible (or intangible) item and its
capacity to satisfy a specific need. When a customer buys a car, he is actually buying the comfortable
ride he anticipates deriving from the car. This is not to mention the psychological benefits attached
to the ownership of a car.
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The services provided by the engineer manager will be evaluated by the client on the basis
of whether or not his or her exact needs are met. When a competitor comes into the picture and sells
the same type of service, the pressure to improve the quality of services sold will be felt. When
improvement is not possible, “extras” or “bonuses” are given to clients. An example is the
construction company that provides “free estimates” on whatever inquiries on construction are
received.
The Price
Price refers to “the money or other considerations exchanged for the purchase or use of the
product, idea, or service.” Some companies use price as a competitive tool or as a means to convince
the customer to buy. When products are similar in quality and other characteristics, price will be a
strong factor on whether or not a sale will be made. This does not hold true, however, in the selling
of services and ideas. This is because of the uniqueness of every service rendered or every idea
generated.
When a type of service becomes standardized, price can be a strong competitive tool. When
a construction firm, for instance, charges a flat 10 percent service fee for all its construction services,
a competitor may charge a lower rate. Such action, however, will be subject to whether or not the
industry will allow such practice.
The Place
If every factor is equal, customers would prefer to buy from firms easily accessible to them.
If time is of the essence, the nearest firm will be patronized.
It is very important for companies to locate in places where they can be easily reached by
their customers. Not every place is the right location for any company.
When a company cannot be near the customers, it uses other means to eliminate or minimize
the effects of the problem. Some of these means are:
1. hiring sales agents to cover specific areas;
2. selling to dealers in particular areas;
3. establishing branches where customers are located;
4. establishing franchises in selected areas.

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Manufacturing companies can choose or adapt all of the above-mentioned options. Service
companies like construction firms adapt the modified versions. An example is the engineer manager
of a construction firm who gives commissions to whoever could negotiate a construction contract for
the firm.
The Promotion
When engineer managers have products or services to sell, they will have to convince buyers
to buy from them. Before the buyer makes the purchasing decision, however, he must first be
informed, persuaded, and influenced. The activity referred to, in this case, is called promotion.
McCarthy and Perreault define promotion as “communicating information between seller and
potential buyer to influence attitudes and behavior.”
There are promotional tools available and the engineer manager must be familiar with them
if he wants to use them effectively. These tools are as follows:
1. advertising
2. publicity
3. personal selling
4. sales promotion
Advertising. Nylen defines advertising as “a paid message that appears in the mass media
for the purpose of informing or persuading people about particular products, services, beliefs, or
action.” The mass media referred to include television, radio, magazines, and newspapers. If the
engineering manager wants to reach a large number of people, he may use any of the mass media
depending on his specific needs and his budget. Each of the public advertising carriers, i.e., radio,
television, magazines, and newspapers, has their own specific audiences and careful analysis must
be made if the engineering manager wants to pick the right one.
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Publicity. The promotional tool that publishes news or information about a product, service,
or idea on behalf of a sponsor but is not paid for by the sponsor is called publicity. The mass media
is also the means used for publicity. If the engineer manager knows how to use it, publicity is a very
useful promotional tool. His message may be presented as a news item, helpful information, or an
announcement.
Personal Selling. A more aggressive means of promoting the sales of a product or service
is called personal selling. It refers to the “oral presentation in a conversation with one or more
prospective purchasers for the purpose of making a sale.”
Personal selling may be useful to the marketing efforts of the engineer manager. If, for
instance, he is the general manager of a firm manufacturing spare parts, he may assign some
employees to personally seek out spare-parts dealers and big trucking companies to carry their
product lines.
Sales Promotion. Any paid attempt to communicate with the customers other than
advertising, publicity, and personal selling, may be considered sales promotion. This includes
displays, contests, sweepstakes, coupons, trading stamps, prizes, samples, demonstrations, referral
gifts, etc.
STRATEGIC MARKETING FOR ENGINEERS
Companies, including those managed by engineer managers, must serve markets that are
best fitted to their capabilities. This is a very important activity called strategic marketing is
undertaken.
Under this set-up, the following steps are made:
1. selecting a target market
2. developing a marketing mix
Selecting a Target Market
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A market consists of individuals or organizations, or both, with the desire and ability to buy a
specific product or service. To maximize sales and profits, a company has the option of sewing
entirely or just a portion of its chosen market. Within markets are segments with common needs and
which will respond similarly to a marketing action.
An analysis of the various segments of the chosen market will help the company decide on
whether to serve all or some of the segments. The segment or segments chosen to become the
target market.
In selecting a target market, the following steps are necessary:
1. Divide the total market into groups of people who have a relatively similar product or service
needs.
2. Determine the profit potentials of each segment.
3. Decide on which segment or segments will be served by the company.
As shown in Figure 11.5, a company may choose any or all of the residential, industrial, and
government segments. This decision will depend, however, on the profit potentials of each segment
and the capability of the firm.
A smaller company may find it most profitable to supply only the construction material needs
of the residential segment. A bigger company, however, may find it more profitable to perform actual
construction in addition to selling construction materials.
Factors Used in Selecting a Target Market. A target market must have the ability to satisfy
the profit objectives of the company. In selecting a target market, the following factors must be taken
into consideration:
1. the size of the market, and
2. the number of competitors serving the market.
The total demand for the product or service in a given area must be determined first if the
company wants to serve that particular market. If there are existing businesses serving the market,
the net demand must be considered. Figure 11.6 illustrates an example of the relationship between
demand and supply of a particular product. The figures presented indicate that there is still room for
another company in the market for telephone lines in Cabanatuan City.
Developing a Marketing Mix

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After the target market has been identified, a marketing mix must be created and maintained.
The marketing mix consists of four variables: the product, the price, the promotion, and the place (or
distribution).
Given a marketing environment, the engineer manager can manipulate any or all variables
to achieve the company's goals. As such, the quality of the product may be enhanced, or the selling
price made a little lower, or the promotion activity made a little more aggressive, or a wider
distribution area may be covered. Any or all of the foregoing may be undertaken as conditions
warrant.
Self-Help:

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Let’s Check
Activity 1 Choose an engineering firm of your choice. You need to make sure that this firm is with
an existing marketing unit. Draw the organization chart of the firm showing the marketing unit and
its relationship with other units.
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Let’s Analyze
1. How may the marketing concept be explained? Is it applicable to an engineering firm?
2. How may the engineer manager meet the threat of a competitor’s product?
3. Why is price said to be a strong competitive tool?
4. How may the engineer manager convince the buyer or client to patronize the firm?
5. In selecting a target market, what must the engineer manager do?
In a Nutshell
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You’ve already known how essential to know about how engineering mangers manage the
marketing function of a company. Also, it tackles the different organizational units of a company.
This time, I will provide you my perspective, and you continue the remaining.
1. Part of the task of any company is to market their products and services that they can offer to
their customer.
2. The responsibility of an engineer manager is to convince customers to patronize their products

and services which is the proper managing of the marketing function.
Q&A List
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1.
2.
3.
4.
5.
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Keywords Index

Procedures

Appraisals
Big Picture in Focus: ULO-3e to show a comprehensive understanding

about how should engineering managers manage the finance function
Metalanguage
For you to demonstrate ULO(e), you will need to have an operational understanding of the following
principles below.
1. Finance Function. The finance function is an important management responsibility

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that deals with the procurement and administration of funds with the view of achieving the
objectives of business.
2. Financing Daily Operations. The day-to-day operations of the engineering firm will
require funds to take care of expenses as they come.
3. Cash sales. Cash is derived when the firm sells its products or services.
4. Collection of Accounts Receivables. Some engineering firms extend credit to
customers. When these are settled, cash is made available.
5. Loans and Credits. When other sources of financing are not enough, the firm will have
to resort to borrowing.
6. Sale of assets. Cash is sometimes obtained from the sale of the company’s assets.
7. Ownership contribution. When cash is not enough, the firm may tap its owners to provide
more money.
8. Advances from customers. Sometimes, customers are required to pay cash advances
on orders made. This helps the firm in financing its production activities.
is also a definition of essential terms.
Essential Knowledge
course, you need to review essential principles in machine elements 2 necessaries that will be
to these resources. Thus, you are expected to utilize other books, research articles, and other
resources that are available in the university’s library e.g. ebrary, search.proquest.com, etc.
MANAGING THE FINANCE FUNCTION
The finance function is an important management responsibility that deals with the
“procurement and administration of funds with the view of achieving the objectives of the business."
If the engineer manager is running the firm as a whole, he must be concerned with the determination
of the number of funds required, when they are needed, how to procure them, and how to effectively
and efficiently use them.
The Finance Function: A Process Flow
1. Determination of Fund Requirements

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- Short-Term
- Long Term
2. Procurement of Funds
- Short-Term
- Long Term
3. Effective and Efficient Use of Funds
- Short-Term
- Long Term
THE DETERMINATION OF FUND REQUIREMENTS
Any organization, including the engineering firm, will need funds for the following specific
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
Financing Daily Operations
The day-to-day operations of the engineering firm will require funds to take care of expenses
as they come. Money must be made available for the payment of the following.
1. wages and salaries

2. rent
3. taxes
4. power and light
5. marketing expenses like those for advertising, entertainment, travel expenses, telephone and
telegraph, stationery and printing, postage, etc.
6. administrative expenses like those for auditing, legal, services, etc.
Financing the Firm's Credit Services
It is oftentimes unavoidable for firms to extend credit to customers. If the engineering firm
manufactures products, sales terms vary from cash to 90~day extensions to customers. Construction
firms will have finance the construction of government projects that be paid many months later.
Financing the Purchase of Inventory
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The maintenance of adequate inventory is crucial to many firms. Raw materials, supplies,
and parts needed to be kept in storage so they will be available when needed. Many firms cannot
cope with delays in the availability of the required material inputs in the duction process, so these
must be kept ready required.
Financing the Purchase of Major Asset
Companies, at times, need to purchase major when top management decides on expansion,
there be a need to make investments in capital assets like land plant and equipment.
Sources of Funds
To finance its various activities, the engineering firm will have to make use of its cash inflows
coming from various sources, namely:
1. Cash sales. Cash is derived when the firm sells its products or services.
2. Collection of Accounts Receivables. Some engineering firms extend credit to customers. When
these are settled, cash is made available.
3. Loans and Credits. When other sources of financing are not enough, the firm will have to resort to
borrowing.
4. Sale of assets. Cash is sometimes obtained from the sale of the company’s assets.
5. Ownership contribution. When cash is not enough, the firm may tap its owners to provide more
money.
6. Advances from customers. Sometimes, customers are required to pay cash advances on orders
made. This helps the firm in financing its production activities.
Short-Term Sources of Funds
Loans and credits may be classified as short-term, medium-term, or long-term. Short-term sources
of funds are those with repayment schedules of less than one year. Collaterals are sometimes
required by short-term creditors.
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Advantages of Short-Term Credits. When the engineering firm avails of short-term credits, the
following advantages may be derived:
1. They are easier to obtain. Creditors maintain the view that the risk involved in short-term
lending is also short-term.
2. Short-term financing is often less costly. Since short-term financing is favored by
creditors, they make it available at less cost.
3. Short-term financing offers flexibility to the borrower. After the borrower has settled his
short-term debt, he may consider other means of financing, if he still requires it. Long-
term financing.
Disadvantages of Short-Term Credits. Short-term financing has also some disadvantages. They are
as follows:
1. Short term credits mature more frequently. This may place the engineering firm in e tight
position more often than necessary.
2. Short-term debts may, at times, be more costly than long-term debts.
Supplies of Short-Term Funds. Short-term financing is provided by the following:
1. trade creditors
2. commercial banks
3. commercial paper houses
4. finance companies
5. factors
6. insurance companies
Trade creditors refer to suppliers extending credit to a buyer for use in manufacturing, processing,
or reselling goods for profit.
A promissory note is an unconditional promise in writing made by one person to another, signed
by the maker, engaging to pay, on-demand or at a fixed or determinable future time, a certain sum
of money to, or to the order of, a specified person or bearer.
Commercial banks are institutions that individuals or firms may tap as a source of short-term
financing.
Commercial paper houses are those that help business firms in borrowing funds from the money
market.
Business finance companies are financial institutions that finance inventory and equipment of
almost all types and sizes of business firms.
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Factors are institutions that buy the accounts receivables of firms, assuming complete accounting
and collection responsibilities.
Insurance companies are also possible sources of short-term funds.
Long-Term Sources of Funds
There are instances when the engineering firm will have to tap the long-term sources of funds.
Long-term sources of funds are classified as follows:
1. long-term debts
2. common stocks
3. retained earnings.
Long-term debts are sub-classified into term loans and bonds.
Team Loans. A term loan is a “commercial or industrial, loan from a commercial bank, commonly
used for plant and equipment, working capital, or debt repayment.
Bonds. A bond is a certificate of indebtedness issued by a corporation to a lender. It is a marketable

security that the firm sells to raise funds.
Common Stocks. The third source of long-term funds consists of the issuance of common stocks.
Since common stocks represent ownership of corporations, many investors are placing their money
in them.
Retained Earnings. Retained earnings refer to “corporate earnings not paid out as dividends." This
simply means that whatever earnings that are due to the stockholders of a corporation ‘are
reinvested.
THE BEST SOURCE OF FINANCING
As there are various fund sources, the engineer manager, or whoever is in charge, must determine
which source is the best available for the firm.
To determine the best source, Schall and Haley recommend that the following factors must be
considered.
1. flexibility
2. risk
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3. income
4. control
5. timing
6. other factors like collateral values, flotation costs, speed, and exposure.
Flexibility
Some fund sources impose certain restrictions on the activities of the borrowers. An example
of a restriction is the prohibition on the issuance of additional debt instruments by the borrower.
Risk
When applied to the determination of fund sources, risk refers to the chance that the company
will be affected adversely when a particular source of financing is chosen.
Income
The various sources of funds, when availed of, will have their individual effects in the net
income of the engineering firm. When the firm borrows, it must generate enough income to cover
the cost of borrowing and still be left with sufficient returns for the owners.
Control
When new owners are taken in because of the need for additional capital, the current group
of owners may lose control of the firm. If the current owners do not want this to happen, they must
consider other means of financing.
Timing
The financial market has its ups and downs. This means that there are times when certain
means financing provide better benefits than at other times. The engineer manager must, therefore,
choose the best time for borrowing or selling equity.
THE FIRM’S FINANCIAL HEALTH
In general, the objectives of engineering firms are as follows:
1. To make profits for the owners

2. to satisfy creditors with the repayment plus interest;
3. to maintain the viability of the firm so that customers will be assured of continuous supply
products or services, employees will be assured of employment, suppliers will be assured of
a market, etc.
INDICATORS OF FINANCIAL HEALTH
The financial health of an engineering firm may be determined by the use of three basic
financial statements. These are as follows:
1. Balance sheet — also called the statement of financial position;
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2. Income statement — also called the statement of operations;

3. Statement of changes in financial position.
RISK MANAGEMENT AND INSURANCE
The engineer manager, especially those at the top level, is entrusted with the function of
making profits for the company. This will happen if losses brought by improper management of risks
are avoided.
Risk defined
Risk refers to the uncertainty concerning loss or injury. The engineering firm is faced with a
long list of exposure to risks, some of which are as follows:
1. Fire
2. Theft
3. Floods
4. Accidents
5. Nonpayment of bills by customers (bad debts)
6. Disability and death
7. Damage claims from other parties.
Type of Risk
Risks may be classified as either pure or speculative. Pure risk is one in which “there is only
a chance of loss.” This means that there is no way of making gains with pure risks. An example of
pure risk is the exposure to loss of the company’s motor car due to theft. Pure risks are insurable
and may be covered by insurance.
What is Risk Management
Risk management is “an organized strategy for protecting and conserving assets and
people." The purpose of risk management is “to choose intelligently from among all the available
methods of dealing with a risk to secure the economic survival of the firm”
Methods of Dealing with Risk
There are various methods of dealing with risks. They are as follows:
1. the risk may be avoided
2. the risk may be retained
3. the hazard may be reduced
4. the losses may be reduced

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5. the risk may be shifted
A person who wants to avoid the risk of losing a property like a house can do so by simply
avoiding the ownership of one. There are instances, however, when ownership cannot be avoided
like those for equipment, appliances, and materials used in the production process. In this case,
other methods of handling risk must be considered.
Self-Help:

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Let’s Check
Activity 1. Now that you know the most essential terms in the study about managing the finance
function. Let us try to check your understanding of these terms. In the space provided, write the
term/s being asked in the following statements:
____________ 1. This term loan refers to a “commercial or industrial, loan from a commercial
bank, commonly used for plant and equipment, working capital, or debt repayment.
____________2. This refers to the third source of long-term funds consists of the issuance of
common stocks.
____________3. This refers to the financial market has its ups and downs. This means that there
are times when certain means financing provide better benefits than at other times.
____________4. Some fund sources impose certain restrictions on the activities of the
borrowers.
____________5. Refers to the various sources of funds, when availed of, will have their individual
effects on the net income of the engineering firm.
____________6. It is a certificate of indebtedness issued by a corporation to a lender. It is a
marketable security that the firm sells to raise funds.
____________7. This is when new owners are taken in because of the need for additional capital,
the current group of owners may lose control of the firm.
____________8. This refers to the uncertainty concerning loss or injury.
____________9. This refers to the chance that the company will be affected adversely when a
particular source of financing is chosen.
____________10. Retained earnings refer to “corporate earnings not paid out as dividends."
Let’s Analyze
1. Determination of fund requirements are? Describe each.
2. What are the sources of Funds? Explain each.
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In a Nutshell
In this chapter, simple yet proven analysis, procedures, and technologies have been described
to improve matrix or risk management. What are the methods of dealing with risk? Describe
each.
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
______________________
Q&A List
1.
2.
3.
4.
5.
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Keywords Index

Procedures

Appraisals
107

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UNIVERSITY OF MINDANAO

College of Engineering Education

Physically Distanced but Academically Engaged

Self-Instructional Manual (SIM) for Self-Directed Learning

Course/Subject: CEE 108 – Engineering Management

Name of Teacher: Engr. Angelie L. Umbay

THIS SIM/SDL MANUAL IS A DRAFT VERSION ONLY; NOT

Course Outline: CEE 108 – ENGINEERING MANAGEMENT

Course Coordinator: Engr. Angelie L. Umbay

Student Consultation: Done by online (LMS) or through text, emails or

Effectivity Date: August 2020

Mode of Delivery: Blended (On-Line with face to face or virtual

Time Frame: 54 Hours

Course Outline Policy

Areas of Concern Details

If the assessment task is done in real time through the

Since this course is included in the licensure examination

Please note that academic dishonesty such as cheating

However, if the late submission of assessment paper

For group assessment tasks, the course coordinator will

Assignment Resubmission The learner should request in writing addressed to the

If disapproved by the course coordinator, the learner can

Grading System All culled from BlackBoard sessions and traditional

All culled from on-campus/onsite sessions (TBA):

Submission of the final grades shall follow the usual

Referencing Style IEEE format

Student Communication You are required to create a umindanao email account

You can also meet the course coordinator in person

For students who have not created their student email,

Contact Details of the Dean Dr. Charlito L. Cañesares

CEE BLACKBOARD Administrator Jetron J. Adtoon

Course Information – see/download course syllabus in the Black Board LMS

CO CO 1. Identify and discuss the fundamentals of engineering

CO 2. Describe the elements involves in solving an engineering problem

a. to recall and apply the functions of engineer and various types of

Big Picture in Focus: ULO-1a. to recall and apply the functions of

1. Management. It is the process of dealing with or controlling things or people.

Please proceed immediately to the “Essential Knowledge” part since the

Introduction to Engineering Management

Manufacturing. Where the engineer is directly in charge of production personnel or

Consulting. Where the engineer works as consultant of any individual or organization

various institutions, public or private.

Teaching. Where the engineer gets employment in a school and is assigned as a

Management. Where the engineer is assigned to manage groups of people performing

The Engineer in Various Types of Organization

What is Engineering Management?

The Process of Management

Requirements for the Engineer Manager’s Job

How one may become a successful Engineer Manager

Ability. Managerial ability refers to the capacity of an engineer manager to achieve

*Medina R. G. (1977). Engineering Management. Philippines: Rex Book Store

*Robbins S. and Coulter M. (2012). Management. Mason, NJ: Pearson

Problem 1: What are the functions of an Engineer? Describe each function.

Problem 2: According to a management researcher, John B. Miller developed a

Do you have any question for clarification?

Questions/ Issues Answers

Construction Ability Engineer Manager

Teaching Manufacturing Motivation Planning

Government Testing Management Organization

Consulting Design and Responsibility Leading