Engineering Management Intro

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ENGINEERING MANAGEMENT


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Management & Its Functions

Definition of management

Functions of management

Management Skills

Management Types

What it is like to be a manager


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Planning

Decision Making

Heirarchy of Plans

Management ObjectivesTools in Developing Good Strategies


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Organizing & StaffingDefinitionStructures of formal organization

Principles of organization

The Art of DelegationSituational Approach to Human Resource

Management

Performance Appraisal

Career Strategies


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Communicating & ControllingCommunication Flow in the organization

Barriers to Communication

Non-Verbal CommunicationEssential Elements of a Control System

Principles of controlling

The PDCA Cycle


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Leading

Elements of Leadership

Types of Leadership

Motivation TheoriesSeven Basic Habits of Highly

Effective People


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Management process by whichselected people design and maintain

an environment in which individualsworking together in groups,efficiently accomplish specific

objectives and goals.


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Management attainment of

organizational goals in an effective

and efficient manner throughplanning, organizing , leading and

controlling organizational resources.


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Productivity output-input ratio within atime period with due consideration for

qualityInput- labor, capital, materials

Output refers to products with higherquality, cheaper price, higher yield,

simpler process, etc.


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Productivity improvement through:

1. Inc O , same I

2. Dec I , same O

3. Inc O , dec I


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Effectiveness attainment ofobjectives getting the job done

Efficiency attainment of ends with

least amount of resources


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Management is

- an economic resource

- a system of authority

- a class and status system


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Roles of a Manager ( H. Mintzberg)

Informational

Monitor, Disseminator , Spokeperson Interpersonal

Figurehead, Leader, Liason Decisional

Entrepreneur, Disturbance handler,Resource Allocator, Negotiator


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Three Fundamental Skills of Managers (R.Katz)

Technical

Human

Conceptual


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Management Level

Top Managers

Middle Managers

First-Line Managers

Non-Managers

Technical

Skills

Human

Skills

ConceptualSkills


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Three Important Factor in Developing Managers

(Charles E. Summer)

Knowledge Factors- ideas , concepts, principles

Attitude Factors-beliefs,feelings,desires,values

Ability Factors-skill, art,judgement,wisdom


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Ethical and Environmental Foundations of Management

Four Important Social Institutions Affecting Value

Systems of Management

Family

Educational System Church

Government


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Four Schools of Thought Relative to Social Responsibility

1. Profit maximization as socially desirable2. No long-run conflict between corporate and social

responsibility.

3. Improvement of ones own organizational behavior

best leads to social betterment

4. Management as trustee


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Some Social Issues faced by modern managers:

- Policies on racial discrimination

- Position on divestment

- Willingness of business to accept voluntary restraints

- Controls over exports to certain countries

- Responsibilities to developing countries

- Support to educational institutions

- Involvement in political campaigns & organization

- Marketing policies in product promotion- Operating policies on social costs

- Involvement in community and family life of employees

- Opportunities for women in roles traditionally for men


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Value Systems and Management

Two approaches to moral questions:

- Natural Law

- Situational EthicsThree Types of Men According to source of moral

direction: (David Riesman)

1. Tradition directed

2. Inner directed

3. Other directed


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Conflict of Six Kinds of Moral Values

Integrity

Self-respect

Rationality of

individual

Peace of mind

Harmony

Logical Consistency

Platonic Justice

Order,Plan

Common Good

Happiness

Desirable results

MaximizedSatisfactions

Efficiency

LawfulnessPrecedents

Customs

,Contracts,

Authorization

Survival

Political Power

Effect on friend-

foe relations

Loyalty

Institutional

Trend

Social Causes

A C T I O N


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Total Corporate Social Responsibility

Economic Responsibility

LegalResponsibility

Contribute to the community and

quality of lifeDiscretionaryResponsibility

EthicalResponsibility Be ethical . Do what is right. Avoid harm

Obey the law.

Be profitable.


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Philosophy of Management

- refers to the general concepts and integrated attitudes

that are fundamental to the cooperation of a social

group. The concept of the firm is the total of how thefirm got where it is, the place it occupies in the industry,

its strengths and weaknesses, the viewpoints of its

managers, and its relationship to social and political

institutions.


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Total Corporate Social Responsibility

Economic Responsibility

LegalResponsibility

Ethical Responsibility

DiscretioanaryResponsibility


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Planning - Decision Making

Decision Making

- process of identifying problems and opportunities

and then resolving them.Decision - refers to the choice made from available

alternatives.


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Programmed & Non-programmed Decisions

Programmed decision - made in response to a situation

that has occurred often enough to enable decision

rules to be developed and applied in the future.Non - Programmed decision - made in response to a

situation that is unique, poorly defined and largely

unstructured, and has important consequence for

the organization.


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Certainty, Risk, Uncertainty, & Ambiguity

Certainty - means all the information that the

decision maker needs are fully available.

Risk means that a decision has a clear-cut

goals and that good information is available,

but future outcomes associated with each

alternative are subject to chance.


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Uncertainty - means that manager know which

goals they wish to achieve, but information

about alternatives and future events are not

complete.

Ambiguity means that goals to be achieved or

the problem to be solved is unclear, alterna-tives are difficult to define, and information

about outcomes is unavailable.


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Organizational Problem

Low Possibility of Failure High

Certainty Risk Uncertainty Ambiguity

Programmed

Decisions

Non-Programmed

Decisions

Problem Solution

Condition that affect the Possibility of Decision Failure


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Decision Making Models

Classical Model based on the assumption that

managers should make logical decisions that will

be in the organizations best economic interests.

Administrative Model describes how managers

actually make decisions in situations characterized

by non-programmed decisions,uncertainty andambiguity ( descriptive, intuition)


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Political Model useful for non-programmed

decisions when conditions are uncertain,

information is limited, and there is disagreement

among managers about what goals to pursue or

what course of action to take.

Coalition informal alliance among

managers to support a specific goal.


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Planning - Decision Making Steps

Decision-Making

Process

1.

3.

2.

4.

5.

6.

Recognition of

Decision

Requirement

Diagnosis

& Analysis

of Causes

Development of

Alternatives

Selection of Desired

Alternatives

Implementation of

Chosen Alternatives

Evaluation andFeedback


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Decision Making By Groups

Cooperative decision making process by which groupattempts to develop a composite organization mind.

Committee- any group interacting in regard to a common

explicit purpose with formal authority delegated froman appointing executive.


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Purposes of Commitees

For fact-finding, investigation, and collecting

information

To avoid appearance of arbitrary decisions and tosecure support for a position

To make a decision a choice among alternatives

To negotiate between conflicting positions taken by

opposing interests To stimulate human beings to think creatively, to

generate ideas, and to reinforce thoughts advanced by

others.


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Purposes of Commitees

To distribute information to brief members of the

organization on plans and facts

To provide representation for important elements of anorganization .

To coordinate different parts and subgroups of an

organization toward common , overall goals.

To train inexperienced personnel through participationof groups with experienced members.


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Advantages of Group Decision Making Process

Decision can be approached from different viewpoints

by individual specialists on a committee.

Coordination of activities of separate departments canbe attained through joint interactions in meetings.

Motivation of individual members to carry out a

decision may be increased by the feeling of participation

in the decision making process.

It is a means by which executives can be trained

It permits representation of different interest groups

Provides venue for creative thinking


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Disadvantages of Group Decision Making Process

Costly; considering the value of time spent by individual

members

Time consuming

Group action may lead to compromise & indecision

A superior line executive at the meeting may make

decision individually , with subordinates attempting to

appear competent by proposing ideas they believe will

make good impression

Committee decisions may be reached by method in

which no one is held responsible for decision ; buck

passing may results


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Decision Making Style

Directive

Analytical

Conceptual

Behavioral


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Analytical Style

- considers complex solutions based on as much data

they can gather

- carefully considers alternatives

- based their decisions on objective rational data from

management control systems and other sources

- search for best possible decision based on available

information


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Conceptual Style

- considers broad amount of information

- are more socially oriented

- considers broad amount of alternatives

- rely on information both from people and systems

- likes to solve problems creatively


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Behavioral Style

- prefers to talk to people one-on-one to understand

their feelings about the problem and the effect of a

given decision upon them.

- concerned with the people development

- make decisions that help others achieve their goals


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Decision Making Involving Probabilities

1. Decision maker should lay out all possible action /

seem reasonable to consider and all the possible

outcomes of these actions.

2. State probability distribution projecting

chances of each outcome that might result from

each act.

3. Decision maker must use some quantitativeyardstick of value that measures the value of

each outcome. Calculate weighted average by

using the assigned probabilities. Calculate EMVs.


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Payoff Table / Decision Tree

Sample Problem: A manager must decide whether to

stock Brand A or Brand B. Either brand can be stocked,

but not both. If A is stocked and it is a success, the

Manager can make $200, but if it is a failure , there can

be a loss of $500. If Brand B is stocked and it is a

Success, the manager can make $400, but if it is aFailure, there can be a loss of $300. Which brand should

be stocked?


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Probability of Brand A Brand B

Success 0.80 0.50

Failure 0.20 0.50

Payoff Table

Strategy

State of Nature

Success Failure

Stock Brand A $200 -$500

Stock Brand B $400 -$300


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Expected Value Payoff Table

StrategyState of Nature

Success Failure

Stock Brand A $200x .80=$160 -$500x 0.20=-$100

Stock Brand B

EMV

$400x .50=$200 -$300x 0.50=-$150

$60

$50


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Decision Tree

Alternatives Outcomes

Brand A

$200x .80=$160

Brand B

$400x .50=$200

-$300x 0.50=-$150

$60

$50

Expected Values

Success

Failure-$500x 0.20=-$100

Success

Failure


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Breakeven Analysis

Variable costs - costs that varies with volume

eg. Direct materials, direct labor, etc.

Fixed costs costs that remains constant regardless

of the quantity of ouput.eg. Equipment cost, rentals, depreciation, etc.


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Planning and Strategic Management

Importance of Planning

- change in technology

- changes in the government policy- changes in the overall economic activity

(including prices, employment of labor, raw

materials, etc)

- changes in nature of competition

- changes in the social norms and attitudes


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Elements of the Planning Process

1. Setting Primary and Intermediate Goals

2. Search for Opportunities3. Formulators of Plans (conversion of

opportunities into strategies and policies)

4. Target Setters

5. Follow- up of Plan


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Useful Generalization of Planning

1. A plan should be directed toward well defined objectives.

2. Plans made by different specialists should be coordinated throughadequate communications among specialists.

3. Planning is a prerequisite to other functions of management.4. Adaptation of plans to current actions demands continual redraftingof plans.

5. Planning pervades the heirarchy of an organization.

6. A manager should relate the degree of commitment of his resourcesto the need for definite plans.

7. Plans should retain flexibility.


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Forecasting Techniques

- Quantitative time series analysis

- Derived forecasts

- Causal Models- Survey of plans and attitudes

- Brainstorming

- Delphi Method


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Forecasting Techniques

- Quantitative time series analysis

- Derived forecasts

- Causal Models- Survey of plans and attitudes

- Brainstorming

- Delphi Method


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Components of Strategic Management

- Goals of Organization

- Mission of Organizations

- Strategy of Organization

- Policies


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Organizing and Staffing

Organizing structure and process of

job allocation ; job-oriented

Staffing pertains to people; worker-

oriented


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Classical Theory of Organization

Contributions:

Clear definition of types of formal organization Certain generalizations that offer first

approximations for planning an organizationstructure

Limited models for organizing activities


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Types of Formal Organization

Line Organization

Staff Organization

Functional Organization


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Comparison of the various types of organization

Line Organization

Advantages:

- Maintains simplicity

- Makes clear division of authority

- Encourages speedy action

Disadvantages:

- Neglects specialists in planning

- Overworks key people

- Depends upon retention of a few key people


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Classical Principles of Organizations

Unity of Command

Exception Principle Span of Control

Scalar Principle

Departmentation

Decentralization


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Classical Principles of Organization

Unity of command - no member of an organization shouldreport to more than one superior on any single function.

Exception Rule recurring decisions should be handled in aroutine manner by lower level managers, whereas problemsinvolving unusual matters should be referred to higher levels

Span of control -there is a limit to the number of

subordinates that one superior should supervise.


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Classical Principles of Organization

Scalar Principle - authority and responsibility should flow in a clearunbroken line from highest executive to the lowest. chain ofcommand

Departmentation activities should be divided and formed intospecialized groups usually referred to as departments.

common types: geographical, commodity or functional

Decentralization -an organizing concept which pushes decision

making to lower levels of the heirarchy.


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Bureaucracy

Regular activities aimed at organization goals are distributed as fixed official duties

Organization follows the principles of heirarchy. Operations are governed by a consistent system of abstract rules that are applied to

individual cases. The ideal official operates as a formalistic impersonality w/out emotion Employment in the organization is based on technical qualifications and not subject to

arbitrary termination. From purely technical point of view, bureaucracy attains the highest degree of efficiency.


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StaffingStaffing Filling, keeping filled, positions in the organizationFilling, keeping filled, positions in the organizationwhich includes identifying the workforce requirement, recruiting,which includes identifying the workforce requirement, recruiting,

selecting, placing, promoting, training, appraising, compensatingselecting, placing, promoting, training, appraising, compensating

and planning for the general welfare of the employees.and planning for the general welfare of the employees.Situational Approach to Human Resource ManagementSituational Approach to Human Resource Management

External EnvironmentExternal Environment

1. Equal employment opportunity1. Equal employment opportunity

2. Women in management2. Women in management3. Staffing for international environment3. Staffing for international environment

Engineering Management Intro

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