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EE2063
Chapter 1
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Companies need leaders who understand technology
and business
Modern-day Economy
Customer needs are
changing rapidly
Intense Global
competition
Very Fast advancement intechnology
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Engineers with proper management
training have great opportunities tomake valuable and lasting
contributions. (Babcock 1996)
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Managers
Employees entrusted with:
Taking decisive actions
Utilizing resources
Controlling internal teams
Guiding external businesspartners
Company
Goals
Planning, Organizing, Leading and
Controlling
Main Areas
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The driving force behind the
evolution of managementtheory is the search for
better ways to utilizeorganisational resources.
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Evolution of Management Theory
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Scientific ManagementTheory
Administrative Management Theory
Behavioural Management Theory
Management Science Theory
Organisational
Environment Theory
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Ancient Management Thoughts
2500BC
Pyramids- 100 000 men
from 20 ~30 years to
complete one pyramid.
Based on trial and error .
No systematic
documentation of the
management strategy and
practices
Chinese emperors
applied principles of
organizing ,
planning, directing
and controlling
Mayan
temples
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An industry where the creation of products and services
is home-based, rather than factory-based. Whileproducts and services created by cottage industry are
often unique and distinctive given the fact that they are
usually not mass-produced, producers in this sector
often face numerous disadvantages when trying tocompete with much larger factory-based companies.
Cottage industry
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Industrial Revolution ( 18 century)
Industrial engineering started in England during the industrial
revolution in mid 18th century ( 1750 1850)
Mainly due to developments in technological innovations that
helped mechanise many traditional manual tasks
Most important invention Steam engine by James Watt
Three basic innovation that brought about the Industrial Revolution
1. Replacement of hand tools with power tools and machines
2. Introduction ofnew power source
3. Operation offactories as a new form of organising forproduction of goods
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Accomplishments / Effects
Factories are formed involving equipment and workers
Destroyed the cottage industry in England
Created problem related to child labour
Poor living conditions for workers, crime, and brutality
This induced the creation of factory layout, inventory control,
production planning, work-flow analysis and cost analysis.
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Small-scale
Crafts Production
Large-scale
Mechanised Manufacturing
Managed by engineers who only
had Technical orientation
Problems faced:
How to handle people
Social problems relating to working togetherin large groups
How to increase efficiency of the worker-task mix
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Famous economist,
Adam Smith,
journeyed aroundEngland in 1700s
studying the effects
of industrialrevolution.
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Each worker
responsible forAll tasks
Each worker performed
only 1 or a few tasks toproduce
Crafts-style Factory System
Poorer performance Few thousands per/day
Cannot be equallySkilled in alltasks
Better performance48,000 pins per day
More skilled at theirtasks
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Job Specialisation Division of Labour
Increased EfficiencyBetter Organisational
performance
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With insights gained from Adam Smithsobservations, other managers and
researchers began to investigate how to
improve job specialisation to increase
performance.
They focused on how to organise and control
the work process.
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Industrial Development in US- 19th Century
Emigrants from England set up textile mills, railroads, steel mills
Charles Babbage ( 1792-1871)
Published a study of that describes the use of machinery and
the organisation of human resources for production purpose.
He advanced the idea of division of labour, factory sizedetermination, profit-sharing, schemes, methods of observing
manufacturing and time-study methods.
Formation of several association to promote exchange of best
practices in engineering and management.
1893 American Society of Engineering Education
1880 - American Society of Mechanical Engineers
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F.W. Taylor (1856-1915)
Scientific Management
He decomposed a job of mechanical
nature into set of elementary motions,discarded unnecessary motions, and
examined the remaining motions
(stopwatch studies) to find the most
efficient method and sequence ofmotion element.
1911studied work methods and shop management
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Taylor believed that if the amount of time and effort that each
worker expends to produce a unit of output can be reduced by
increasing specialisation and division of labor, the productionprocess will become more efficient.
He put forward the idea that workers are motivated mainly by pay.
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His Theory of Scientific Management argued the following:
Workers do not naturally enjoy work and so need closesupervision and control
Therefore managers should break down production into a
series of small tasks
Workers should then be given appropriate training and toolsso they can work as efficiently as possible on one set task.
Workers are then paid according to the number of items they
produce in a set period of time, i.e. piece-rate pay.
As a result, workers are encouraged to work hard and maximizetheir productivity.
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Taylors Principles
1. Study the way workers
perform their tasks, gather all
informational job knowledgethat workers possess, and
experiment with ways of
improving how tasks are
performed
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2. Codify the new methods of performing tasks into
written rules and standard operating procedures.
3. Carefully select workers who possess skills and
abilities that match the needs of the task, and train
them to perform the task according to theestablished rules and procedures.
4. Establish a fair or acceptable level of performance
for a task, and then develop a pay system that
provides a reward for performance above the
acceptable level.
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Taylor focused on production aspects without paying
attention the workers. According to Taylor, work is divided
into planning/training (a management responsibility) androte execution (by the uneducated worker of the day).
Taylor
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This scientific management became nationally known,
but the selective implementation of the principles
created more harm than good
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Workers felt that as their performance increased,
managers required them to do more work for the
same pay.
Increases in performance meant fewer jobs and
greater threat of layoffs
Monotonous and repetitive
Dissatisfaction
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This led to an increase in strikes and other forms of
industrial action by dissatisfied workers.
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Fordused Taylors principle
Achieving the right mix of worker-task specialisation
Linking people and tasks by the speed of the
production line
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Taylors methods were widely adopted
as businesses saw the benefits of
increased productivity levels and lower
unit costs. The most notable advocate
was Henry Ford who used them to
design the first ever production line,
making Ford cars. This was the start of
the era of mass production.
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Franklin Motor Company
Redesigned the work process using the scientificmanagement principles.
Production increased from 100 cars a month to 45 cars
a day.
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The Gilbreths Study of Human Factors
Frank Gilbreth (1868-1924) He was a bricklayer, a building contractor, and a management
engineer. He was a member of the ASME, the Taylor Society (precursor
to the SAM), and a lecturer at Purdue University.
Lilian Gilbreth (1878-1972)
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Time and Motion Study
1. Break and analyse every individual actionnecessary to perform a particular task intoeach of its component actions
2. Find better ways to perform each
component action3. Reorganise each component action so that it
is more efficient: less cost of time and effort
Their goal was to maximise the efficiency withwhich each individual task performed.
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Study of Fatigue
How physical characteristics of the workplace
contribute to job stress
Effects of lighting
Effects of heating
Effects of color of walls
Design of tools and machines
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Administrative Management Theory
Henri Fayol- Principles of Management
Divided the industrial undertakings to six groups:technical, commercial, financial, security, accounting andadministrative.
Developed 14 general principles of administration
Administrative Management
The study of how to create an organisationalstructure that leads to high efficiency (least
effort) & effectiveness (creates value).
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14 Principles of Management
1. Division of Labour
2. Authority & Responsibility
3. Unity of Command
4. Line of Authority
5. Centralisation6. Unity of Direction
7. Equity
8. Order
9. Initiative
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10. Discipline
11.Remuneration of
Personnel
12.Stability of tenure of
Personnel13.Subordination of
Individual Interests to
the Common Interest
14.Esprit de Corps
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1. Division of Labour
Job specialisation and the division of labour
should increase efficiency.
Pointed out the downside of too much
specialisation; so workers should be given
more duties to perform.
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2. Authority and ResponsibilityManagers have the right to give orders and the
power to exhort subordinates for obedience.
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3. Unity of Command
An employee should receive orders from only
one superior.
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4. Line of AuthorityThe length of the chain of command that
extends from the top to the bottom of an
organisation should be limited.
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5. Centralisation
Authority should not be concentrated at the top
of the chain of command.
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6. Unity of DirectionThose operations within the organisation that
have the same objective should be directed by
only one manager using one plan. E.g. personnel
department in a company should not have twodirectors each with a different hiring policy.
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7. Equity
Managers should be both friendly and fair to
their subordinates.
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8. OrderMaterials and people should be in the right
place at the right time. People should be in
the jobs that they are most suited to.
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9. Initiative
Subordinates should be given the freedom to
conceive and carry out their plans, even
though some mistakes may result.
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10. DisciplineMembers in an organisation need to respect the
rules and agreement that govern the
organisation. To Fayol, discipline results from good leadership, fair
agreements and judiciously enforced penalties for
infractions.
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11. Remuneration of Personnel
Compensation for work done should be fair to
both employees and employers.
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12. Stability of Tenure of Personnel
A high employee turnover rate undermines the
efficient functioning of an organisation.
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13. Subordination of Individual
Interests to the Common Interest
Interests of employees should not take
precedence over the interests of the
organisation as a whole.
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14. Esprit de CorpsPromoting team spirit gives the organisation a
sense of unity.
To Fayol, even small factors help develop thespirit. E.g. use verbal communication instead offormal, written communication wheneverpossible.
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Theory of Bureaucracy
Max Weber (1864-1920)
Developed the principles ofbureaucracy-a formal system of
organisation and administration
designed to ensure efficiency
and effectiveness.
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S f i l d
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System of written rules and
SOPs that specify how
Employees should
behave
Selection and evaluation
System that rewardsEmployees fairly and
Equitably.
Clearly specified
System of task and
Role relationships
Clearly specified
Hierarchy of
authority
A bureaucracy
Should have
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Five Principles:
1. A Managers formal authority derives from
the position he or she holds in the
organisation
2. People should occupy positions because of
their performance, not because of their
social standing or personal contacts.
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3. The extent of each positions formal authority
and task responsibilities and its relationshipto other positions in an organisation, should
be clearly specified.
4. Authority can be exercised effectively in an
organisation when positions are arranged
hierarchically, so employees know whom to
report to and who reports to them.
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5. Managers must create a well-defined system
ofrules, standard operating procedures and
norms so that they can effectively control
behaviour within an organisation.
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Rules
Formal written instructions that specify actions
to be taken under different circumstances to
achieve specific goals.
Rule: At the end of the day employees are to
leave their machines in good order.
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Standard Operating Procedures
(SOP)
Specific sets of written instructions about how
to perform a certain aspect of a task.
SOP:
Specifies exactly how they should do so, which
machine parts should be oiled or replaced.
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Norms
Norms are unwritten, informal codes of conduct
that prescribe how people should act in
particular situations.
E.g.: An organisational norm in a restaurant
might be that waiters should help each other
if time permits.
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Behavioral Management Theory
The Work of Mary Parker Follet
The Hawthorn Studies and Human Relations
Theory X and Y
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Human Factors
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Behavioral Management
The study of how managers should behave to
motivate employees and encouragethem to
perform at high levels and be committed to
the achievement of organisational goals.
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Mary Parker Follet
Mary Parker Follett advocated for a
human relations emphasis.
Her work contrasted with the
"scientific management" ofFrederick W. Taylor.
Mary Parker Follett stressed the
interactions of management and
workers.
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Follett was one of the first to integrate the
idea of organisational conflict intomanagement theory, and is sometimes
considered the "mother of conflict
resolution.
She coined the words "power-over" and
"power-with" to differentiate coercive power
from participative decision-making.
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She was of the view that authority should go
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She was of the view that authority should gowith knowledge.
Advocatedinvolvement of workers in jobanalysis and work development process.
Managers of different departments shouldcommunicate with each other directly.
Cross-functioning
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Th H h S di
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The Hawthorne Studies
Study effect of illumination on productivity
Found the increased production was due to
management interest
Hawthorne effect is the finding that a
managers behaviour or leadership approach
can affect workers level of performance.
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Theory X and Theory Y
Douglas McGregor proposed that two sets of
assumptions about how work attitudes and
behaviors not only dominate the way
managers think but also affect how theybehave in organisations.
He named these two assumptions:
Theory X and Theory Y.
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Theory X
Assumptions:
Average worker is lazy
Dislikes work
Will try to do as little as possible
Have little ambition and avoid responsibility
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Managers Who Accept Theory X
To keep performance high, workers must be
supervised closely and their behaviors be
controlled by means of the carrot and stick-
rewards and punishments.
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Design and shape work setting to maximisecontrol over workers behaviors.
Minimise the workers control over the paceof work.
Focus is on development of rules, SOPs and a
well-defined system of reward andpunishment to control behavior.
Managers see little point in giving autonomy
to solve their own problems. Managers see their role as closely monitoring
workers.
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Theory Y
Assumptions:
Workers are not inherently lazy
Do not naturally dislike work
If given the opportunity, will do what is good
for the organisation.
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Characteristics of the work setting determine
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Characteristics of the work setting determinewhether workers consider work to be a source ofsatisfaction or punishment.
Managers do not need to closely control workersbehavior.
They exercise self-control
Decentralise authority
Accountable for their jobs
Managers role is not to control but to provide
support and advice and to evaluate them on their
ability
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Skills for Managers/Leaders
LeadershipSkills
Administrative
Skills
Technical Skills
What it takes for engineers to be selected as managers?Do all engineers want to be managers?
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Work of an Engineer As Technical Contributor
Understandobjectives of tasks specified
Develop action plan for implementation
Define standards (performance metrics)
Selectmethodology/techniques
Implementtask with proper effort
Generate results and secure value Reportfindings (impact, lessons)
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Tips for Engineers
Demonstrate Technical Competence & Innovativecapabilities
Brush Up Communications skills (ask, listen, writeand talk)
Showunfailing reliability to induce trust andconfidence
Be Proactive in seeking challenging tasks
Exhibitreadiness for assuming larger responsibilities(take courses, practice skills, gain experience)
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Typical Engineering Activities
Design/development of products/processes Project engineering/management
Value engineering and analysis
Technology development and R&D(laboratory, field)
Production/manufacturing and construction
Customer service
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Engineering Managers
Four Dimensional WorkWork with boss
EngineeringManager
Work withsubordinates
With self(Manage own
time)
Peers,Staff people
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Engineering Management Functions
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Engineering Management Functions
Planning(forecasting, setting objectives, action
planning, administering policies, establishing
procedure)
Organising (selecting organisational structure,delegating, establishing working relationship)
Leading (deciding, communicating, motivating,
selecting/developing people)
Controlling (setting performance standards,evaluating/documenting/correcting performance)