Chapter 1

THE FIELD OF
ENGINEERING
MANAGEMENT
Engineers are expected to perform a
variety of tasks depending on their
specialization and job level. It is
important to the engineer that he
knows what is expected of him so that
he may be able to perform his job
effectively and efficiently.
 THE FUNCTIONS OF THE
ENGINEER
1. The stone bladed axe which was a very useful tool; and
the irrigation system used to promote crop growing – 6000-
3000 B.C.
2. The pyramids of Egypt – 3000-600 B.C.
3. Roadbuilding by the Romans – 600 B.C.-A.D. 400;
4. Theproduction of paper and gunpowder by the Chinese
– 100 A.D.-1600 A.D.
5. The
production of steam engine and the spinning and
weaving machinery – 1601 A.D. – 1799 A.D.; and
6. The
manufacture of cars and household appliances –
modern times.
Engineershave become an indispensable
segment of the world’s professions.

Even as engineers are currently

producing solutions to many of the
difficulties faced by mankind, much is
still expected of them. Their outputs,
new or improvements of old ones, are
very much needed in the ff. specific
problem concerns.
1.Production of more food
2.Elimination of pollution
3.Solid waste disposal and recycling
4.Reduction of noise in various forms
5.Supplying the increasing demand in
energy
6.Supplying the increasing demand for
mobility
7.Preventing and solving crimes
8.Meeting the increasing demand for
 Specifically, the functions of the engineering encompass the ff.
areas:

1. Research – where the engineer is engaged in the process of

learning about nature and codifying this knowledge into usable
theories.
2. Design and Development – where the engineer undertakes the
activity of turning a product concept to a finished physical item.
3. Testing – where the engineer works in a unit where new products
or parts are tested for workability.
4. Manufacturing – where the engineer is directly in charge of
production personnel.
5. Construction – this is where the construction engineer may have
quality for the quality of the construction process.
6. Sales – where the engineer assists the company’s customers to
meet their needs.
7. Consulting – where the engineer works as consultant to anyone
requiring his services.
8. Government – where the engineer may find employment in the
government performing any of the various tasks in regulating,
monitoring and controlling the activities of various institutions,
public or private.
9. Teaching – where the engineer gets employment in a school and
is assigned as a teacher of engineering courses.
10. Management – where the engineer is assigned to manage
groups of people performing specific tasks.
The Engineer in Various Types of Organization

1. Level one – those with

minimal engineering jobs
like retailing firms.
2. Level
two – those with a
general moderate degree of
Management
skills required
engineering jobs like
transportation companies.
specialized
3. Levelthree – those with
Lvl Lvl Lvl
1 2 3 a high degree of
engineering jobs like
construction firms.
Management Skills Required at Various Levels

Among the types of organizations, the engineer will have a slim

chance of becoming the general manager or president of level
one, unless of course, he owns the firm. The engineer manager
may be assigned to head a small engineering unit of the firm, but
there will not be too many firms which will have this unit.
In level two firms, the engineer may be assigned to head the
engineering division. The need for management skills will now be
felt by the engineer manager.
Level three firms provide the biggest opportunity for an
engineer to become the president or general manager. In this
case, the engineer manager cannot function effectively without
adequate management skills.
What is ENGINEERING
MANAGEMENT?
 Refers to the activity combining “technical knowledge with the ability
to organize and coordinate worker power, materials, machinery, and
money.”
 When the engineer is assigned to supervise the work of even a few
people, he is already engaged in the first phase of engineering
management. His main responsibility is to lead his group into
producing a certain output consistent with the required specifications.
 The top position an engineer manager may hope to occupy is the
general managership or presidency of any firm, 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 definition
May be defined as the
“creative problem solving-
process of planning,
organizing, leading and
controlling an organization’s
resources to achieve its
mission and objectives.”
The Process of Management
MANAGEMENT is a process consisting of planning,
organizing, directing (or leading), and controlling.

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, determine the human
requirements of the total job, assign specific tasks to
specific persons, motivate them, and provide means to
make sure that the activities are in the right direction.
 REQUIREMENTS FOR THE ENGINEER
MANAGER’S JOB
1. A bachelor’s degree in engineering from a
reputable school. In some cases, a master’s
degree in engineering or business
management is required.
2. A few years experience in a pure
engineering job.
3. Training in supervision.
4. Special training in engineering
management.
HOW ONE MAY BECOME A
SUCCESSFUL ENGINEER MANAGER
Three general preconditions for achieving
lasting success as a manager:
1.Ability – managerial ability refers to the
capacity of an engineer manager to achieve
organizational objectives effectively and
efficiently.
2.Motivation to manage
3.Opportunity
MOTIVATION TO MANAGE
Many people have the desire to work and
finish specific tasks assigned by superiors, but
not many are motivated to manage other
people so that they may contribute to the
realization of the organization’s objectives.
JOHN B. MINER – a management researcher,
developed a psychometric instrument to
measure objectively an individual’s motivation
to manage.
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 a distinctive way, which includes standing out
from the crowd.
7. Sense of responsibility in carrying out the routine duties associated
with managerial work.
OPPORTUNITY

Successful managers become possible only if those

having the ability and motivation are given the
opportunity to manage. The opportunity for
successful management has 2 requirements:

1. Obtaining a suitable managerial job.

2. Finding a supportive climate once on the job.
 TO BE SUCCESSFUL

You don’t need a BETTER JOB

You don’t need a BETTER HOME
You don’t need a BETTER PHONE
You don’t need a BETTER CAR
You don’t need a BETTER CLOTHES
But,
You need a BETTER MINDSET
 “ NEVER STOP
DOING YOUR BEST
JUST BECAUSE
SOMEONE DOESN’T
GIVE YOU CREDIT.”
 “BE
THE
BEST
VERSION
OF
YOURSELF.”
Chapter 2
DECISION-MAKING
“ It is in your moments
of decision that
your destiny is
shaped.”
Tony
Robbins
 DECISION MAKING
 Managers of all kinds and types including the
engineer manager, are primarily tasked to provide
leadership in the quest for the attainment of
organization’s objectives. If he is to become
effective, he must learn the intricacies of decision-
making.
 Theengineer manager’s decision-making skills will
be very crucial to his success as a professional.
 Good decisions, on the other hand, will provide the
right environment for continuous growth and
DECISION-MAKING AS A
MANAGEMENT RESPONSIBILITY
Decision-making is a responsibility of
the engineer manager. Management
must strive to choose a decision option
as correctly as possible. The higher the
management level is, the bigger and
the more complicated decision-making
becomes.
WHAT IS DECISION-MAKING?
DECISION-MAKING may be defined as
“the process of identifying and choosing
alternatives courses of action in a
manner appropriate to the demands of
the situation.”
It indicates that the engineer manager
must adapt a certain procedure designed
to determine the best option available to
solve certain problems.
THE DECISION-MAKING PROCESS
Rational decision-making, according to DAVID H. HOLT, is a
process involving the ff. steps:
1. Diagnose problem – If a manager wants to make an
intelligent decision, his first move must be to identify the
problem. A problem exist when there is a difference between
an actual situation and a desired situation.
2. Analyze the environment – is the identification of
constraints, which may be spelled out as either internal or
external limitations. Ex. Of internal limitations:(limited
funds, limited training, ill-designed facilities) Ex. Of external
limitations: (patents, limited market, strict enforcement of
local zoning regulations)
 COMPONENTS OF THE ENVIRONMENT
a. Internal environment- refers to organizational activities within a firm that
surrounds decision-making.
b. External environment- refers to variables that are outside the organization
and not typically within the short-run control of top management.

3. Articulate problem or opportunity -

4. Develop Viable Alternatives – this is made possible

with the ff. steps:
c. Prepare a list of alternative solutions.
d. Determine the viability of each solutions.
e. Revise the list by striking out those which are not viable.
 THE ENGINEERING FIRM
INTERNAL ENVIRONMENT

Organizational Aspects
like org. structure, policies, procedures,
rules, ability of management, etc.
EXTERNAL
ENVIRONMENT
Marketing Aspects
Like product strategy, promotion strategy,
etc.
DECISION
Personnel Aspects
Like recruitment practices, incentive
systems, etc.
EXTERNAL
ENVIRONMENT
Production Aspects
Like plant facility layout, inventory control,
etc.

Financial Aspects
Like liquidity, profitability, etc.
 EXTERNAL ENVIRONMENT

GOVERNMENT
ENGINEERS LABOR UNIONS

CLIENTS ENGINEERIN SUPPLIERS

G FIRM

COMPETITOR
S BANKS
PUBLIC
 EVALUATE ALTERNATIVES
 Thisis important because the next step involves making a
choice. Proper evaluation makes choosing the right
solutions less difficult.
 How the alternatives will be evaluated will depend on the
nature of the problem, the objectives of the firm, and the
nature of alternatives presented.
 SOUDER suggests that “each alternative must be analyzed
and evaluated in terms of its value, cost, and risk
characteristics.
 Thevalue of alternatives refers to benefits that can be
expected.
 Therisk characteristics refer to the likelihood of
achieving the goals of the alternatives.
MAKE A CHOICE

CHOICE-MAKING refers to the process

of selecting among alternatives
representing potential solutions to a
problem.
WEBBER advises that “…particular
effort should be made to identify all
significant consequences of each
choice.”
IMPLEMENT DECISION
IMPLEMENTATION - refers to carrying out the decision so
that the objectives sought will be achieved. To make
implementation effective, a plan must be devised. At this
stage, the resources must be made available so that the
decision may be properly implemented.
EVALUATE AND ADAPT DECISION RESULTS
In implementing the decision, the results expected may or
may not happen. It is therefore, important for the manager to
use control and feedback mechanisms to ensure results and to
provide information for future decisions.
FEEDBACK – refers to the process which requires checking at
each stage of the process to assure that the alternatives
generated.
APPROACHES IN SOLVING
PROBLEMS
Qualitative evaluation
1.

2. Quantitative evaluation

QUALITATIVE EVALUATION – refers to evaluation of alternatives using intuition and subjective

judgment.
STEVENSON states that managers tend to use the qualitative approach when:
3. The problem is fairly simple.
4. The problem is familiar.
5. The costs involved are not great / low costs.
6. Immediate decisions are needed.

QUANTITATIVE EVALUATION – refers to the evaluation of alternatives using any technique in a

group classified as rational and analytical.
QUANTITATIVE MODELS FOR DECISION MAKING
1. Inventory models
2. Queuing theory
3. Network models
4. Forecasting
5. Regression analysis
6. Simulation
7. Linear programming
8. Sampling theory
9. Statistical decision theory
INVENTORY MODELS
1.Economic order quantity model – is used to
calculate the number of items that should be ordered
at one time to minimize the total yearly cost of
placing orders and carrying the items in inventory.
2.Production order quantity model – is an
economic order quantity technique applied to
production orders.
3.Back order inventory model – is an inventory
model used for planned shortages.
4.Quantity
discount model – an inventory model
used to minimize the total cost when quantity
 QUEUING THEORY

 Is one that describes how to determine the number of service units that
will minimize both customer waiting time and cost of service.
 Is applicable to companies where waiting lines are a common situation.
NETWORK MODELS
1. THE PROGRAM EVALUATION REVIEW TECHNIQUE (PERT) – a
technique which enables engineer managers to schedule, monitor, and
control large and complex projects by employing three time estimates for
each activity.
2. THE CRITICAL PATH METHOD (CPM) – a network technique using only
one time factor per activity that enables engineer managers to schedule,
monitor, and control large and complex projects.
FORECASTING – the collection of past and current information to make
predictions about the future.
SAMPLING THEORY – a quantitative
technique where samples of populations are
statistically determined to be used for a
number of processes, such as quality control
and marketing research.

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.
 CHAPTER 3
PLANNING TECHNICAL ACTIVITIES
“IF YOU FAIL TO PLAN,
YOU PLAN TO FAIL.”

- ALAN LAKEIN
THE NATURE OF PLANNING

There are many instances when managers are

overwhelmed by various activities which at times
becloud his judgment.
This must be expected since anybody who is
confronted by several situations happening
simultaneously will lose sight of the more
important concerns.
To minimize mistakes in decision-making,
planning is undertaken.
A plan, which is the output of planning,
provides a methodical way of achieving
desired results.

In the implementation of activities,

the plan serves as a useful guide.
Without the plan, some minor tasks
may be afforded major attention which
may, later on, hinder the
accomplishment of objectives.
PLANNING DEFINED
Planning, according to Nickels and others, refers
to “the management function that involves
anticipating future trends and demining the best
strategies and tactics to achieve organizational
objectives.”

Aldag and Stearns, on the other hand, define

planning as “the selection and sequential
ordering of tasks requires to achieve an
organizational goal.” this definition centers on the
activity required the accomplish the goals.
 The definition of Cole and Hamilton provides a
better guide on how to effectively perform this vital
activity. Planning, according to them is “deciding
what will be done, who will do it, where, when and
how it will be one, and the standards to which it
will be done.”

For our purposes, it will suffice to define

planning as selecting the best course of action so
that the desired result may be achieved. It must be
stressed that the desired result takes first priority
and the course of action chosen is the means to
realize the goal.
PLANNING AT VARIOUS
MANAGEMENT LEVELS
Since engineer manager could be occupying positions
in any of the various management levels, it will be
useful for them to know some aspects of planning
undertaken at the different management levels.
Planning activities undertaken at various levels
are as follows:
1. TOP MANAGEMENT LEVEL – STRATEGIC PLANNING

2. MIDDLE MANAGEMENT LEVEL – INTERMEDIATE

PLANNING

3. LOWER MANAGEMENT LEVEL – OPERATIONAL PLANNING

STRATEGIC PLANNING
 The term strategic planning 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. The top management of any firm is
involved in this type of planning.

 In strategic planning, the whole company is

considered, specially its objectives and current resources.
The output of strategic planning is the “strategic plan”
which, spells out “the decision about long-range goals and
the course of action to achieve these goals.”
INTERMEDIATE PLANNING
 Intermediate planning refers to “the process of
determining the contributions that subunits
can make with allocated resources.” this type
of planning is undertaken by middle
management.

 Under intermediate planning, the goals of

a subunit are determined and a plan is
prepared to provide a guide to the realization
of the goals. The intermediate plan is designed
to support the strategic plan.
OPERATIONAL PLANNING
 The term operational planning refers to “the
process of determining how specific tasks can
best be accomplished on time with available
resources.”

 This type of planning is a responsibility of

lower management. It must be performed in
support of the strategic plan and the
intermediate plan.
THE PLANNING PROCESS
The process of planning consists of various steps
depending on the management level that
performs the planning tasks. Generally,
however, planning involves the following:
1. setting organizational. divisional, or unit
goals
2. developing strategies of tactics to reach those
goals
3. determining the resources needed and
4. setting standards.
SETTING ORGANIZATIONAL, DIVISIONAL, OR
UNIT GOALS
The first task of the engineer manager is to provide a
sense of direction to his firm (if he is the chief executive),
to his division (if he heads a division), or to his unit (if he is
a supervisor).
The setting of goals provide an answer to the
said concern. If everybody in the firm (or division or unit,
as the case maybe) is aware of the goals, there is a big
chance that everybody will contribute his share in the
realization of such goals.
Goals maybe defined as the “precise statement
of results sought, quantified in time and magnitude, where
possible.
 DEVELOPING STRATEGIES OR TACTICS TO
REACH GOALS

After determining the goals, the next task is to

devise some means to realize them. The ways to realize
the goals are called strategies and these will be the
concern of top management. The middle and lower
management will adapt their own tactics to implement
their plans.
A strategy maybe defined as “a course of action
aimed at insuring that the organization will achieve its
objectives.”
DETERMINING RESOURCES NEEDED
When particular sets of strategies or tactics have
been devised, the engineer manager will, then, determine
the human resources required by such strategies or
tactics. Even if the resources requirements are currently
available, they must be specified.
The quality and quantity of resources needed must
be currently determined. Too much resources in terms of
either quality or quantity will be wasteful. Too little will
mean loss of opportunities for maximizing income.
To satisfy strategic requirements, a general
statement of needed resources will suffice. The specific
requirements will be determined by the different units of
the company.
SETTING STANDARDS
The standards for measuring performance
may be set at the planning stage. When actual
performance does not match with the planned
performance, corrections may be made or
reinforcements given.

A standard may be defined as “ a

quantitative or qualitative measuring device
designed to help monitor the preformances of
people, capital goods, or process.”
PLANS WITH TIME HORIZON
Plans with the time horizon consist of the following:

1. Short-range plans – these are the plans intended

to cover a period of less than a year. First-line
supervisors are mostly concerned with these
plans.
2. Long-range Plans – these are plans covering a
span of more than one year. These are mostly
undertaken by middle and top management.
PLANS ACCORDING TO FREQUENCY OF USE
According to frequency of use, plans may be classified as:
1. STANDING PLANS – are used again and again, and they focus on
managerial situations that recur repeatedly.
Standing Plans may be further classified as follows:
a. Policies – they are broad guidelines to aid managers at
every level in making decisions about recurring situations or
function.
b. Procedures – they are plans that describe the exact
series of actions to be taken in a given situation.
c. Rules – they are statements that either require or forbid a
certain action.
2. SINGLE-USE PLAN – these are plans specifically
developed to implement courses of action that are
relatively unique and are unlikely to be repeated.

Single –use plans may be further classified as

follows:

1. Budget – is a plan which set forth the

projected expenditure for a
certain activity and explains where the required
funds will come from.
2. Program – is a single-use plan designed to
coordinate a large set of activities.
3. Project – is a single-use plan that is usually
more limited in scope than a
program and is sometimes prepared to
support a program.
 Chapter 4
ORGANIZING TECHNICAL
ACTIVITY
REASON FOR ORGANIZING

Organizing is undertaken to facilitate the

implementation of plans. In effective organizing, steps are
undertaken to breakdown the total job into more
manageable man-size jobs.
Doing these will make it possible to assign particular
tasks to particular persons. In turn, these will help
facilitate the assignment of authority, responsibility, and
accountability for certain functions and tasks.
ORGANIZING DEFINED
Organizing is a management function which
refers to “the structuring the resources and
activities to accomplish objective in an efficient
and effective manner.”
The arrangement or relationship of position
within an organization is called the structure. The
result of the organizing process is the structure.
THE PURPOSE OF THE STRUCTURE
The structure serves some very useful purposes. They are
the following:

1. It defines the relationships between tasks and authority

for individuals and departments.
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 department
and departments into 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 of 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.” what is depicted in the
organization chart is the formal organization. It is “the planned structure”
and it “represents the deliberate attempt to establish patterned
relationships among components that will meet the objectives effectively.”
The formal structure is described by management through:
1. Organization chart – a diagram or the organization’s official positions
and formal lines of authority.
2. Organizational manual – it provides written descriptions of authority
relationships, details the functions of major organizational units, and
described job procedures.
3. Policy manual – describes personnel activities and company policies.
INFORMAL GROUPS
Informal groups are oftentimes very useful in
the accomplishment of major tasks, especially if
these tasks conform with the expectations of the
members of the informal group.
The informal organization, useful as it is, is
“vulnerable to expediency, manipulation, and
opportunism,” according to Valentine. Its low
visibility, Valentine added, makes it “difficult foe
management to detect these perversions, and
considerable harm can be done to the company.”
TYPES OF ORGANIZATIONAL STRUCTURES
Organizations may be classified into three types. They are the
following:
1. Functional organization – this is a 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 – these refers to the
organization of a company by divisions that brings together all
these 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.
TYPES OF AUTHORITY

The delegation of authority is a requisite for effective

organizing. It consists of three types. They are as follows:
 Line authority – a manager’s right to tell subordinates what to
do and then see that they do it.
 Staff authority – a staff specialist’s right to give advise to a
superior.
 Functional authority – a specialist’s right to oversee lower level
personnel involved in thst specialty, regardless of where the
personnel are in the organization.