Eng'g Management Chapters 3 and 4

8/13/2019 Eng'g Management Chapters 3 and 4

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BATANGAS STATE UNIVERSITY

College of Engineering, Architecture and Fine Arts

Gov. Pablo Borbon Campus II,

Alangilan, Batangas City, Philippines 4200www.batstate-u.edu.ph Telefax: (043) 300-4044 locs. 106-108

IE 551

Engineering Management

Prepared by:

Caraan, Zaila Marie R.

Magboo, Princess Joy M.

Rendon, Cathryne Joy L.

Torrano, Eddylyn Marie C.

ChE 5202

November 2013


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Chapter 3PLANNING TECHNICAL ACTIVITIES

The Nature of Planning

A plan, which is the output of planning, provides a methodical way of achievingdesired results.

In the implementation of activities, the plan serves as a useful guide. Without theplan, some minor tasks may be afforded major attention which may, later on,hinder the accomplishment of objectives.

Planning Defined

Planning according to various experts refers to;

the management function that involves anticipating future trends anddetermining the best strategies and tactics to achieve organizational objective.

Nickels and others the selection and sequential ordering of tasks required to achieve an

organizational goal. Aldag and Stearns

deciding what will be done, who will do it, where, when and how it will be done,and the standards to which it will be done. Cole and Hamilton

For our purpose, it will suffice to define planning as selecting the best course ofaction so that the desired result may be achieved.

Planning at Various Management Levels

Planning activities undertaken at various levels are as follows:1. Top management levelstrategic planning2. Middle management levelintermediate planning3. Lower management leveloperational planning

1. Strategic PlanningThe term strategic planning refers to the process of determining the major

goals of the organization and the policies and strategies for obtaining and usingresources to achieve those goals. The top management of any firm is involved inthis type of planning.

In strategic planning, the whole company is considered, specifically itsobjectives and current resources. The output of strategic planning is the strategic

planwhich spells out the decision about long range goals and the course ofaction to achieve these goals.

2. Intermediate PlanningIntermediate planning refers to the process of determining the contributions

that subunits can make with allocated resources. This type of planning isundertaken by middle management.


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Under intermediate planning, the goals of a subunit are determined and aplan is prepared to provide a guide to the realization of the goals. Theintermediate plan is designed to support the strategic plan.

3. Operational Planning

The term operational planning refers to the process of determining howspecific tasks can best be accomplished on time with available resources. Thistype of planning is a responsibility of lower management. It must be performed insupport of the strategic plan and intermediate plan.

The Planning ProcessGenerally, planning involves the following:

1. Setting Organizational, Divisional or Unit GoalsThe first task of the engineer manager is to provide a sense of direction to his

firm, to his division, or to his unit. The setting of goals provides an answer to the said

concern.Goalsmay be defined as the precise statement of result sought, quantified intime and magnitude, where possible.

2. Developing Strategies or Tactics to Reach GoalsAfter 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 theconcern of top management. The middle and lower management will adapt their owntactics to implement their plans.

A strategy may be defined as a course of action aimed at ensuring that theorganization will achieve its objectives.

A tactic is a short-term action taken by management to adjust to negative internalor external influences. They are formulated and implemented in support of the firmsstrategies. The decision about short-term goals and the courses of action areindicated in the tactical plan.

3. Determining Resources NeededWhen particular set of strategies or tactics have been devised, the engineer

manager will, then, determine the human and nonhuman resources required by suchstrategies or tactics. Even if the resource requirements are currently available, theymust be specified.

The quality and quantity of resources needed must be correctly determined. Toomany resources in terms of either quality or quantity will be wasteful. Too little willmean loss of opportunities for maximizing income.

To satisfy strategic requirements, a general statement of needed resources willsuffice. The specific requirements will be determined by the different units of thecompany.

4. Setting Standards


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The standards for measuring performance may be set at the planning stage.When actual performance does not match with the planned performance, correctionsmay be made or reinforcements given.

A standard may be defined as a quantitative or qualitative measuring devicedesigned to help monitor the performances of people, capital goods, or processes.

An example of a standard is the minimum number of units that must be producedby a worker per day in a given work situation.

Fig. 3 Types of Plans

TYPES OF PLANS

Plans are of different types. They may be classified in terms of functional areas, timehorizon and frequency of use.

Functional Areas Plans

Plans may be preapared according to the needs of the different functional areas.

Among the types of functional area plans are the following:

1. Marketing Planthis is the written document or blueprint for implementing andcontrolling an organizations marketing activities related to a particular marketingstrategy.

2. Production Plan this is written document that states the quantity of output acompany must produce in board terms and by product family.


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3. Financial Planit is a document that summarizes the current financial situationof the of the firm,analyzes financial needs and recommends a direction forfinancial activities.

4. Human resouce management planit is a document that indicates the humanresource needs of a company detailed in terms of quantity and quality and based

on the requirements of the companys strategic plan.

Plans with Time Horizon

1. Short range Plans these are plans intented to cover a period of less thanone year. First-line supervisors are mostly concerned with these plans.

2. Long- range Plans these are plans covering a time span of more than oneyear. These are mostly undertaken by middle and top management.

Plans according to Frequency of Use

1. Standing Plans plans that are used again and again and they focus onmanagerial situations that recur repeatedly. This is further classified into:

a. Policies they are broad guidelines to aid managers at every level inmaking decisions about recurring situations or function

b. Procedures they are plans that describe the exact series of actions tobe taken in a given situation

c. Rulesthey are statements that either require or forbid a certain action2. Single Use PlansPlans that are specifically developed to implement courses

of action that are relatively unique and are unlikely to be repeated. Furtherclassified as follows:

a. Budgets a plan which sets forth the expenditure for a certain activityand explains where the required funds will come from

b. Programdesigned to coordinate a large set of activitiesc. Project usually limited in scope than a program that is sometimes

prepared to support a program

PART OF THE VAROIUS FUNCTIONAL AREA PLANS

Contents Of Marketing Plan

1. The Executive Summary presents an overall view of marketing projectand its potential

2. Table of Contents

3. Situational Analysis and Target Market

4. Marketing Objectives and Goals

5. Marketing Strategies

6. Marketing Tactics


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7. Schedule and Budgets

8. Financial Data and Control

Contents of the Production Plan

1. The amount of capacity of the company must have

2. How many employees are required

3. How much material must be pruchased


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Contents of Financial Plan

1. An analysis of the firms current financial condition as indicated by ananalysis of the most recent statements

2. A sales forecast

3. The capital budget

4. The cash budget

5. A set of pro forma (or projected) financial statements

6. The external financing plan

Contents Of Human Resource Management plan

1. Personnel requirements of the company


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2. Plans for recruitment and selection

3. Training plan

4. Retirement plan

PARTS OF THE STRATEGIC PLAN

1. Company or corporate mission refers to the strategic statement thatidentifies why an organization exists,its philosophy of management and itspurpose as distinguished from other similar oraganizations in terms ofproducts,services and markets

2. Objectives or goals

3. Strategies

MAKING PLANNING EFFECTIVE

1. Recognize the planning barriers

Planning barriers according to Plunkett and Attner

1. Managers inability to plan

2. Improper planning process

3. Lack of commitment to the planning process

4. Improper information

5. Focusing on the present at the express of the future

6. Too much reliance on the planning department

7. Concentrating on only the controllable variables

2. Use of Aids in planning

1. Gather as much information as possible

2. Develop multiple sources of information

3. Involve others in the planning process


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Chapter 4

Organizing Technical Activities

Reasons for Organizing

- to facilitate the implementation of plan

- breakdown the total job into more manageable man-size jobs

Organizing

- is a management function which refers to the the structuring of resources

and activities to accomplish objectives in an efficient and effective

manner.

Structure

- It is the arrangement or relationship of positions within an organization.

- Result of organizing process

Purpose of Structure

1. It defines the relationship between task 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 grouping of individuals into departments and departments in the

organization.

4. It defines the system to effect coordination of effort in both vertical (authority) and

horizontal (tasks) directions.

When structuring an organization, the manager must be concerned with the

following:

1. Division of labordetermining 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


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3. Departmentation the grouping of related job, 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.

Formal Organization

- the structure that details lines and responsibilities, authority, and position.

- planned structure and it represents the deliberate attempt to establish

patterned relationships among the components that will meet the objectives

effectively.

The formal structure is described by management through:

Organizational chart

- diagram of the organizations official positions and formal lines of

authority

Organizational Manual

- provides written descriptions of authority relationships, details thefunctions of major organizational units, and describes job procedures

Policy manual

-describes personnel activities and company policies

Informal Groups

- Group with friendship as a principal reason for belonging

- Vulnerable to expediency, manipulation, and opportunism. It is low visibility,

makes it difficult for management to detect these perversions, and

considerable harm can be done to the company. ( Valentine, 1982)


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Fig 4.1 Reasons or Factors for Joining or Forming a Group

Types of Oganizational Structures

1. Functional Organizationform of departmentation in which everyone engaged

in one functional activity, such as engineering or marketing, is grouped into one

unit.

2. Product or Market Organizationrefers to the organization of the company by

division that bring together all those involved with a certain type of product or

customer

3. Matrix Organization- an organizational structure in which each employee

reports both a functional or division manager and to a project or group manager.

Functional Organization

Organizational structure that uses the principle of specialization based onfunction or role.

Effective in smaller firms, specially single-business firms where key activitiesrevolve around well-defined skills and areas of specialization.

Advantages:

1. The groupings of employees who perform a common task permit a economies


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of scale and efficient resource use.2. Since the chain of command converges at the top of the organization,

decision-making is centralized.3. Communication and coordination among employees within each department

are excellent.

4. Promotes high-quality technical problem-solving.5. Provided with in depth skill specialization and development.6. Employees are provided with career progress within functional departments.

Disadvantages:1. Communication and coordination between the departments are often poor.2. Decisions that are more than one department pile up at the top management

level and are often delayed.3. Work specialization and division of labor produce routine, no motivating

employee tasks.4. Difficult to identify which group is responsible for certain problems.

5. Limited view of organizational goals by employees.6. Limited general management training for employees.

Product or Market Organization With its feature of operating by divisions, it is appropriate for large corporation

with many product lines in several related companies.

Advantages:1. Flexible and responsive to change.2. Provides high concern for customers needs.3. Provides excellent coordination across functional departments.4. Easy pinpointing of responsibility for product problems.5. Emphasis on overall product and division goals.6. Development of general management skills is provided.

Disadvantages:1. High possibility of duplication of resources across divisions.2. Less technical depth and specialization in divisions.3. Poor coordination across divisions.4. Less top management control.5. Competition for corporate resources.

Matrix Organization According to Thompson and Strickland, it is a structure with two or more

channels of command, two lines of budget authority, and two sources ofperformance and reward.

Higgins declared that the matrix structure was designed to keep employees in acentral pool and to allocate them to various projects in the firm according tolength of time they were needed.

Advantages:


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1. More efficient use of resources than the divisional structure.2. Flexibility and adaptability to changing environment.3. Development of both general and functional management skills are present.4. Interdisciplinary cooperation and any expertise are available to all divisions.5. Enlarged tasks for employees which motivate them better.

Disadvantages:1. Frustration and confusion from dual chain of command.2. High conflict between divisional and functional interests.3. Many meetings and more discussion than action.4.A need for human relations training for key employees and managers.5. Tendency for power dominance by one side of the matrix.

AUTHORITY It is the right to perform or command. It allows its holder to act in certain

designated ways and to directly influence the actions of other.

TYPES OF AUTHORITY

1. Line Authority a managers right to tell subordinates what to do and then see they do it.

2. Staff Authority a staff specialists right to give advice to superior.

3. Functional Authority a specialists right to oversee lower level personnelInvolved in that specialty, regardless of where thepersonnel are in the organization.

Line departments perform tasks that reflect the organizations primary goal andmission.

Staff d epartments include all those that provided specialized skills in support ofline departments.

Examples: Strategic Planning Accounting Labor Relations PersonnelResearch

Funct ional Auth or i ty is one given to a person or work group to make decisionsrelated to their expertise even if these decisions concern other departments.

THE PURPOSE OF COMMITTEES

Committee - is a formal group of persons formed for a specific purpose.


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The prod uct planning comm ittee, as described by Millevo, is often staffed bytop executives from marketing, production, research, engineering, and finance, whowork part-time to evaluate and approved product ideas.

Classification of Committees:

1. Ad hoc committee one created for a short term purpose and have a limitedlife.

Example: Committee created to manage the anniversary festivities of the firm.

2. Standing committee it is relatively permanent committee that deals withIssues on an ongoing basis.

Example: Grievance committee which is set up to handle initially complaintsfrom employees of the organization.

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Eng'g Management Chapters 3 and 4

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