iii

COURSE DESCRIPTION

This three (3) unit subject deals with the different functions of management, decision making,
managing production and service operations, marketing function and finance function.

LEARNING OUTCOMES

By the end of the course, the students will be able to do the following:

1. explain the basic concepts of engineering management; and

2: apply the principles of engineering management to analyze case study

GENERAL GUIDELINES/CLASS RULES

1. Make-up exams and quizzes will only be given with prior approval of the professor and
under exceptional circumstances. For excused absences during the exam, the university
policy will be followed.

2.Students are not allowed to leave the classroom once the class has started, unless extremely
necessary. Students who leave the classroom without any valid reason will be marked absent.

3.Students are expected to comply strictly with the university’s rule on dress code, class
tardiness and attendance.

4.Cell phones or any e-gadgets must be turned off or put in a silent mode during class hours.

5. Late homework or projects will not be accepted. Students are expected to maintain
complete honesty and integrity in their academic work. Acts of academic dishonesty, such as
cheating, plagiarism, or inappropriately using the work of others to satisfy course
requirements, will not be tolerated and may result in failure of the affected assignments
and/or failure of this class.

Students with Special Needs:

A student with special medical needs, is advised to inform the instructor as to how he/she can
best assist him/her. All information will be considered confidential.

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for EDUCATIONAL PURPOSES ONLY and is NOT FOR SALE NOR FOR REPRODUCTION.
 iv

GRADING SYSTEM

The student will be graded according to the following:

Average of examinations - 50%

Average of assessments - 50%

Prelim Grade : [(Prelim Exam x 0.50) + (Assessment x 0.50)]

Midterm Grade : [(Midterm Exam x 0.50) + (Assessment x 0.50)]
End term Grade : [(Final Exam x 0.50) + (Assessment x 0.50)]

Final Grade : (Prelim Grade x 0.30) + (Mid-term Grade x 0.30) + (End term
Grade x 0.40)]

The passing grade for this course is 5.0.

This module is a property of Technological University of the Philippines Visayas and intended
for EDUCATIONAL PURPOSES ONLY and is NOT FOR SALE NOR FOR REPRODUCTION.
 1

LEARNING GUIDE

Week No.: __1__

TOPIC/S

 ENGINEERS IN THE INDUSTRY

 FUNCTIONS OF ENGINEER

 MANAGEMENT AND ENGINEERING MANAGEMENT DEFINE

 IMPORTANCE OF ENGINEER MANAGER IN THE INDUSTRY

EXPECTED COMPETENCIES

Upon completing this Learning Module, student will be able to:

1. describe engineering management in the engineering profession and future

career;
2. identify different functions of Engineers; and
3. explain the importance of engineer manager in the industry

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for EDUCATIONAL PURPOSES ONLY and is NOT FOR SALE NOR FOR REPRODUCTION.
 2

CONTENT/TECHNICAL INFORMATION

Engineers can be found in many areas in the industry and are expected to perform a
several tasks assigned to them based on their specialty and job description and level. It is
essential to the engineer that he knows what is expected of him so that he can perform
effectively and efficiently.

Engineers played a different role in the organization. They are usually involved in
finding solutions to the problems encountered in the industry and society. Below are list of
function/s of an engineer:

1.Research – where the engineer is engaged in the process of learning about nature
and codifying that knowledge into functional theories

2.Design and development – where the engineer undertakes the task of transforming
the idea of the product into finished physical objects

3.Testing – where the engineer works in a unit where the workability of new products
or parts is tested

4. Manufacturing – where the engineer is solely responsible for the production

workers or is responsible for the product

5. Construction – where the engineer is directly in charge of the construction

personnel or can be responsible for the quality of building process

6.Sales - where the engineer assists customers in meeting their needs, in particular
those requiring technical expertise

7.Consulting – where the engineer is the consultant of any person or organization

requiring his professional expertise

8. Government – where the engineer is employed in the government performing any

of the different tasks in regulating, monitoring, and controlling the
activities of several institutions, public or private

9. Teaching – where the engineer gets a position at the school and is trained as an
engineering teacher. Some are deans, directors, presidents and
chairman

10 Management – where the engineer is assigned to handle groups of individuals

carrying out different tasks

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Engineers may be classified in different levels according to their educational

achievement, acquired experiences and trainings. A level one engineer are those that basically
assigned to engineering jobs that requires expertise. When the engineer is assigned to lead a
group of people, he is already introduced to the engineering management job which already
requires management skills. President, Chairman, Director or CEO would be the highest
position that an engineer could obtain, where most of his functions would focus on the
management side and less on the technical.

Engineer Manager’s Qualification:

1. Graduate of a bachelor’s degree in engineering or master’s degree in

engineering or business management;
2. Experiences in the engineering field;
3. Managerial or Supervisory Training; (which may include engineering
management)

Management and Engineering Management Define:

Merriam Webster’s Dictionary describes Management as “the act or art of managing:

the conducting or supervising of something (such as a business).” And Engineering is
defined as “the application of science and mathematics by which the properties of matter and
the sources of energy in nature are made useful to people.”

Organizations, Corporations and Enterprises are generally governed by its President,

Chief Executive, Chairperson and Managers. Managers affect every phase in the industry
like, Production Managers affecting operations productivity and output, Marketing Managers
whose more focused on promoting and selling of the products or services. In the preceding
industries many of these people are associated purely to business and management but in the
modern industries most of them are both technically inclined and knowledgeable in business
and management, where most of the managers are also engineers.

In Daniel Babcock’s book, Managing Engineering and Technology, he defines, “The

engineer manager is distinguished from other managers because he (or she) possesses both
an ability to apply engineering principles and a skill in organizing and directing people and
projects. He is uniquely qualified for two types of jobs: the management of technical
functions (such as design or production) in almost any enterprise, or the management of
broader functions (such as marketing or top management) in a high-technology enterprise.”

Based on businessdictionary.com, Engineering Management is “a field that

concentrates on the application of engineering principles for the effective planning and
efficient operations of managing manufacturing or industrial operations.”

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for EDUCATIONAL PURPOSES ONLY and is NOT FOR SALE NOR FOR REPRODUCTION.
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Engineering management is an activity where engineers apply their technical and

management skills gained from academe, profession and trainings, to improve or affect the
operation of the industry through effective planning, coordinating and controlling of resource,
processes and assets.

IMPORTANCE OF ENGINEERING MANAGEMENT IN THE INDUSTRY

Managers are important in our lives because they serve a very special purpose. They
are the one responsible for the new and improved products that most of us are enjoying. They
also steer our economy and standard way of living move forward. Effective management is
always the key to have a developed industry and country.

Figure 1: List of Engineers who became successful Presidents, Founder, CEO and Chairperson
in the other countries:
Name Function / Position Educational Background
BS in Computer Science and
Virginia Rometty Former IBM CEO and Electrical Engineering
chairwoman - Northwestern University
BS in Metallurgical Engineering
- Indian Institute of Technology,
Google, Inc. And Alphabet MS in Material Science
Sundar Pichai Inc. CEO - Stanford University
MBA
- University of Pennsylvania’s
Wharton School
BS in Aerospace Engineering
Dennis Muilenburg Former Chairman, president - Iowa State University
and CEO of Boeing, Inc. MS in Aeronautics and
Astronautics
- University of Washington
Jeff Bezos Founder and CEO of BS in Electrical Engineering and
Amazon.com Computer Science
- Princeton University
Mary Barra General Motors CEO BS in Electrical Engineering
- General Motors Institute
(Kettering University)
(source: https://www.designnews.com/electronics-test/15-engineers-who-became-
ceos)

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for EDUCATIONAL PURPOSES ONLY and is NOT FOR SALE NOR FOR REPRODUCTION.
 5

Figure 2: In the Philippines some of the political leaders and business tycoons also holds a
degree in Engineering.
Name Function / Position Educational Background
BS in Civil Engineering
- National University in Manila
BS in Military Engineering
Fidel V. Ramos 12th President of the - United States Military Academy
Republic of the Philippines Master's Degree in civil engineering
- University of Illinois
Master's Degree in Business
Administration
- Ateneo de Manila University
BS in Mechanical Engineering
- Mapua Institute of Technology,
First president of Philippine Doctor of Science (honorary degree)
National Oil Company - Mapua Institute of Technology
Geronimo Z. Velasco (PNOC) and Chairman of Doctor in Industrial Management
(deceased) Republic Glass Holdings and Engineering (honorary degree)
Corp - De La Salle University
Doctor of Laws (honorary degree)
- Philippine Women's University
.David Consunji Founder and former CEO of BS in Civil Engineering
(deceased) DMCI Holdings Incorporated - University of the Philippines
Ramon S. Ang San Miguel Corporation CEO BS in Mechanical Engineering
- Far Eastern University
(source://www.philstar.com/lifestyle/business-
life/2011/11/07/744950/kgElLGvg3VfKjEKz.99)

BECOMING AN EFFECTIVE ENGINEER MANAGER:

Becoming an engineer manager does not happen by chance, one must strive
hard to acquire it. According to Robert Kreitner in order to become a successful
engineer manager one must understand the preconditions of an effective management:

1. Managerial ability refers to the potential of an engineer to successfully and

efficiently accomplish operational objectives

2. Motivation to manage - some employees believe that they are much more
effective working alone but there are others who wants to work with group of people in
achieving the organization’s goal

3. Opportunity - successful management can only be realize if the engineer is

suited to the management position and its working environment is supportive

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PROGRESS CHECK

I. Identification: Identify the following functions of Engineers: (2 points each)

___________ 1. Where the engineer undertakes the task of transforming the idea of
the product into finished physical objects

___________ 2. Where the engineer assists customers in meeting their needs, in

particular those requiring technical expertise

___________ 3. Where the engineer works in a unit where the workability of new
products or parts is tested

___________ 4. Where the engineer is assigned to handle groups of individuals

carrying out different tasks

___________ 5. Where the engineer is solely responsible for the production workers
or is responsible for the product

II. Discussion: (5 points each)

1. Explain briefly the importance of engineering management in the industry.

2. Discuss why engineers are most likely to be managers.

REFERENCES

Textbook/s :

Roberto G. Medina (1999). Engineering Management. Rex Publishing Incorporated

Samuel C. Certo (2000). Modern Management. Pearson Educational Asia Pte Ltd.

Richard L. Daft (2003). Management. Thomas Learning Asia (6th edition)

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 7

LEARNING GUIDE

Week No.: __2__

TOPIC/S

 SIGNIFICANCE OF DECISION MAKING FOR ENGINEER MANAGER

 DEFINE DECISION AND DECISION MAKING

1. CATEGORIES OF DECISION
2. DIFFERENT MODELS OF DECISION-MAKING

 DECISION MAKING PROCESS OR STEPS

 DIFFERENT APPROACH AND TOOLS USED FOR SOLVING PROBLEMS

EXPECTED COMPETENCIES

Upon completing this Learning Module, the students will be able to:

1. explain the importance of decision making as engineer manager;

2. define decision-making, categories and different models of decision
making;
3. apply the steps of decision-making process in creating decision; and
4. identify the different approach on problem solving

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for EDUCATIONAL PURPOSES ONLY and is NOT FOR SALE NOR FOR REPRODUCTION.
 8

CONTENT/TECHNICAL INFORMATION

Managers of the industries, including the engineer manager, are mainly responsible
for providing guidance in the effort to accomplish the goals of the company. To become
effective, he must learn the complexity in making decisions. Several times, the engineer
manager will have to face the situation where he will have to select between multiple
choices. Whatever he decides will have an impact on the operations of the organization.

The ability of the engineer manager to decide is very important to his professional
success. Any wrong decisions the managers will make will be accounted to him.

MANAGEMENT RESPONSIBLITY: DECISION - MAKING

Managers are also called decision makers. Organizations may succeed, change or
fail base on the decisions of the manager. Decisions are made at different levels of
organization, from workers up to the management. A worker can decide whether or not to
render overtime, a manager can also decide whether or not to implement a new policy for
the operation. Decision making can also be done in any period of the operation like
deciding to do a changeover in case of machine failure or stopping the operation for repair
or to proceed with the production even when the customers requirement is less.

Decision making is a duty of an engineer manager. Effective decision-making is an

integral part of effective management, because decisions influence how the company
addresses its challenges, assigns its resources and carries out its goals. Any wrong decisions
the managers will make will be accounted to him. But successful managers immediately
correct the problem once they find it out.

Since the management has the power, the decisions they make will have a big impact
in the organization. The manager must make a correct decision as possible. Those in the
higher position will have to make a much important decision compared those who are in the
lower position.

DECISION AND DECISION MAKING DEFINE

Merriam Webster’s Dictionary defines decision as “a determination arrived at after

consideration.” Decision happens when a manager selects from available options. Decision-
making is a process of finding, selecting alternative courses of action to resolve the problem
in a manner appropriate to the need of the situation.

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CATEGORIES OF MANAGEMENT DECISION:

1. Programmed Decision - a decision taken in response to a recurring problem

experienced by the organization.

2. Non-Programmed Decision - a decision taken in response to unique or

unique problem which has a great impact on the organization.
Many unprogrammed decisions require strategic planning,
since there is considerable complexity and difficult decisions

The key distinction between programmed and non-programmed decisions involves

the degree of certainty or ambiguity managers are working with when making the decision.

Engineer manager will try to find all the possible information in order to resolve the
problem. The lesser the information the manager gathers the more difficult it will be for him
to make decision or most likely he will fail to address the issue.

Figure 1: Condition that affects the possibility failure

1. Certainty means that all the required information is fully available for the
decision-maker

2. Risk means that the decision has specific goal and that sufficient
information is available, but potential results associated with
each choice are open to chance

3. Uncertainty means that administrators know what goals they want to

accomplish, but knowledge on alternatives and possible events
is incomplete

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4. Ambiguity means that the goals to be accomplished or the issue to be

overcome is ill-defined, that solutions are difficult to determine
and that information on results is inaccessible

DECISION - MAKING MODELS

1. CLASSICAL MODEL - a model for decision taking, based on the concept that
managers should make rational decisions in the best economic interests of the
organization
- uses a normative approach, which explains how decision-maker
should decide, it provides direction on how to achieve organizations goal
- this type of model is most likely to be effective for programmed
decisions and those with less risk and information’s are certain

Example:
Retailers who uses systems for inventory of goods where they are able
to identify when to reorder or restocks their goods.

2. ADMINISTRATIVE MODEL - also known as bounded rationality model

- a model of decision-making explaining how managers actually make
decisions in circumstances marked by non-programmed decisions
- this model recognizes limitations on resources and environment that
affect the degree to which managers make decision

Example:
The manager finds out that the material for soldering process is not
enough for the scheduled operation. Since there is available material that
complies with the specification requirement of the product, he allows the
usage of the material in order to prevent downtime on the operation.

3. POLITICAL MODEL - is useful in making non-programmed decisions where

circumstances are unclear, knowledge is scarce and managers are in
disagreement about what target to achieve or what course of action to take
- represents the actual environment in which engineer managers make
complex decisions

Example:
Engr. Castro develops an expansion project to resolve the congestion
issue of final goods and return. Since some of the managers consider the cost
of the project, Engr. Castro had difficulty to push through with it. So he
develop an alliance of fellow managers to support the project.

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DECISION-MAKING PROCESS:

Normally, many of us believe that once a solution is selected we have already made
our decision. In management, choosing is only a part of decision-making process. Below is
the process for an effective decision-making.

1. Recognition of the criteria for decision

2. Cause Analysis
3. Development and evaluation of feasible solutions
4. Selecting desirable option
5. Implementing decision
6. Result review and evaluation

1. Recognition of the criteria for decision

For a manager to make a good decision, he first identify whether it is an opportunity

or a problem. Correct identification of problem results to a better outcome because if you
don’t identify the problem correctly you might be selecting a solution which doesn’t directly
resolve the issue.

Problem - occurs when your desired outcome is not similar to the existing
situation

Opportunity - exists when managers see a potential achievement that exceeds

the specified current objectives.

2. Analyzing Cause/s

Once the engineer manager verifies a problem or an opportunity, he then identifies the
cause of the problem such as when and where the problem occurs, how did it happen, who is
responsible of the operation during the problem occurrence and how urgent the issue should
be resolve. Determining the environmental constraints is also part of analysis. Environmental
constraint could be internal or external. Internal constraints are those concerning the
organization or the firm, while external are those that are not controlled by the management.

Example of internal environment are organizational aspects, marketing, human

resource, finance and production, while external environment may include but is not limited
to customers, government, suppliers, competitors, financial institution and labor unions.

3. Development and evaluation of feasible solutions

 Development of feasible solution

The next goal is to generate possible alternative solutions that will respond to the
situation requires to correct the underlying causes. For programmed decisions solutions may
be oftentimes available in the operational processes and procedures but for non-programmed
decision, the engineer manager must develop at least 2-3 possible solutions.

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 Evaluation of alternatives

Engineer manager must evaluate the solutions identified for the problem. Based on
Souder, “evaluation of the alternatives will depend on the its value, cost and risk
characteristics.”

Value - refers to the expected outcome

Cost - refers to the money involve in implementing the solution

Risk Characteristics - refers to the probability of achieving the expected

outcome

All consequences that each of the alternatives may encounter should be

consider in the evaluation.

4. Selecting desirable option

After evaluation of alternatives, engineer manager must choose from the presented
solutions. When the selected alternative can resolve the issue effectively with less usage of
resources, we can say that the engineer manager chose the best solution among his
alternatives.

5. Implementing decision

Implementation of the alternative should be made once the solution is selected.

Discussion to the affected department or groups should be made prior to the implementation.
This is to ensure that manpower, energy, materials, machines and funds is available and the
affected department can prepare for the possible adjustments in the operation.

6. Result review and evaluation

Result after alternative implementation may be positive or negative. The engineer

manager must gather information necessary to check whether the solution is effective or not.
Once the desired target is achieved the operations will adapt the implemented alternative.

Feedback from the implementing person or department is important, especially when

the alternative fails. Once the feedback is negative, the engineer manager may consider to
review again from the first process.

In decision - making, engineer managers doesn’t always resolve the issue directly,
even how smart he is. They may sometimes make wrong decisions. Managers can avoid the
factors causing bad decisions by being aware of the following six biases:

1. Being influenced by initial impressions

2. Justifying past decisions
3. Seeing what you want to see
4. Perpetuating the status quo

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5. Being influenced by problem framing

6. Overconfidence

The situation the engineer manager face is not always simple, but sometimes
complicated. Managers must be familiar with the following approaches to help them in
making decision.

APPROACHES IN SOLVING PROBLEMS

1.Qualitative evaluation - refers to the assessment of alternatives using previous

experiences and intuition

According to Stevenson, managers will use a qualitative approach when: the

problem is easy, the problem had been encountered before, the cost involve is low and
the situation requires immediate decision.

Example:
The production operates everyday as per scheduled plan, when suddenly one
machine in Line 7 of the die attached process encounters a breakdown. The operator
reported it to his line leader and supervisor, then requested for a repair. But after
checking, the maintenance department informs that the repair will take 2-3 days. After
being informed, the manager decided to change over to another product model to
avoid longer breakdown.

2. Quantitative evaluation - refers to the evaluation of alternatives using any method

defined as analytical and logical

Different types of quantitative techniques:

1. Inventory models - consists of several types, all designed to assist the engineer
manager in making inventory decisions

2. Queuing Theory - is one that explains how to assess the number of service units
that will reduce both waiting time and service costs for customers

3. Network Models - these are models in which large complex tasks are divided into
smaller segments which can be handled independently

4. Forecasting - defined as the collection of past information and current knowledge

to predict the future

5. Regression Analysis - is a forecasting method which examines the links between

two or more variables

6. Simulation - used for theoretical modelling of natural systems or human processes

to gain insight into how they operate

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7. Linear Programming - is a quantitative methodology used to generate an optimal

solution within the limits placed on the decision by constraints

8. Sampling Theory - a quantitative methodology that statistically establishes samples

of populations to be used in various systems, such as quality assurance and
marketing analysis

9. Statistical Decision Theory - refers to a logical way of conceptualizing, evaluating

and addressing issues in circumstances involving minimal or incomplete
information of the issue

PROGRESS CHECK

A. Answer the following briefly (2 points each)

1. Differentiate decision from decision -making?

2. Enumerate decision - making models.

3. Identify the process of decision - making

4. What is the different approach in solving problem? Explain

5. Enumerate the different factors or biases that could affect managers decision

B. Questions for review and discussion (5 points each)

1. Analyze three decisions you made over the last six months. Which of these
were programmed and which were non-programmed? Which model best describes the
approach you took to make each decision?

2. Do you think intuition is a valid approach to make decisions in an

organization? Why or why not?

3. Why decision - making is considered a fundamental part of the effectiveness

of management?

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for EDUCATIONAL PURPOSES ONLY and is NOT FOR SALE NOR FOR REPRODUCTION.
 16

LEARNING GUIDE

Week No.: __3__

TOPIC/S

 DEFINE PLAN AND PLANNING

1. PLANNING AT VARIOUS MANAGEMENT LEVEL

2. TYPES OF PLAN

 IMPORTANCE OF PLANNING IN THE INDUSTRY

 PLANNING PROCESS

 MAKING PLANNING EFFECTIVE

EXPECTED COMPETENCIES

Upon completing this Learning Module, student will be able to:

1. define planning and its importance to the industry;

2. identify types of planning at different management level;
3. illustrate the various types of plans;
4. describe planning process and how to make it effective; and
5. create an example of individual strategic plan

CONTENT/TECHNICAL INFORMATION

One of engineer managers duty is to determine the organization’s future and success
and how to achieve it. Managers ability to plan can help in implementing right decision.
Regardless of the level of the management, the engineer manager will have to create a plan
for his area or department. The higher the position of the manager the more complex the plan
the plan that he should make.

PLAN AND PLANNING DEFINE

Planning is the most significant function of a manager but is also the most
complicated. Determining the organizations success relative to the changing environment. A
manager must face a difficulty of implementing the plan while the situation changes. A plan
which is the product of planning, is not always perfect. But the plan helps the operation and
the employees to focus on the goal.

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According to Merriam Webster’s dictionary a goal is “the end toward which effort is
directed.” Goals are important, they are identified and specified for the operations to exist. A
plan is a blueprint for achieving the target and sets out the appropriate allocations of
resources, schedules, tasks and other actions. It serves as a reference to achievement of the
goal. Planning is “the systematic development of action programs aimed at reaching agreed-
upon business objectives by the process of analyzing, evaluating and selecting among the
opportunities which are foreseen.”¹ According to Cole and Hamilton, planning is "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.”² Planning as define, provides a better guide to effectively implement
activities for target to be achieve.

LEVELS OF PLANS AND GOAL

The different level of management corresponds to the different plans the manager
should make. Below is a presentation of different level of plans and their importance

Figure 1: Different Levels of Plans

The planning commences from organization’s mission which defines its basic
purpose, in particular for external audience. The mission serves as the basis for developing
the strategic goal which in turn formulate tactical and operational goal. Top management
such as CEO, President and Chairman are responsible for the strategic plan where
organizations objective is indicated. Strategic planning according to Nickels and others,
“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.” Tactical or Intermediate
plan is developed by middle management managers. Functional managers or department
heads are some of them. They devise the tactical plan that concentrate on the division's main
activities to serve its role in the strategic strategy set out by top management. Kreitner defines
intermediate planning as the “process of determining the contributions that subunits can make
with allocated resources.” Operational plans describe the basic procedures or processes

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 18

necessary at lower organizational levels. Operational planning refers to the process of

determining how specific tasks can best be accomplished on time with available resources.

Front-line managers and supervisors create operational plans which focus on specific tasks
and processes and help meet tactical and supervisory needs. Planning at various level
supports the other level to accomplish the organizational targets.

Figure 2: Planning ar different level of organization

Strategic Plan

Intermediate
Plan

Operational
Plan

TYPES OF PLANS

Plans are classified into various types. Below is the list of different types of plan:

1.Functional Area Plans:

- These plans are prepared by the different functional areas who needs it

A Marketing Plan – is a written document for the implementation and control

of the marketing activities of an organization in relation
to a particular marketing strategy

B. Production plan – is a written document that states the number of outputs a

company must produce in accordance to the customers
requirements

C. Financial Plan – is a document summarizing the current financial status of

the organization, assessing its financial need, and
recommending activities to improve it

D. Human resource plan – it is a document showing a company's human

resources needs, based on the criteria of the company's
strategic plan such as quantity and quality of the
workers.

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 19

2.Plans With Time Horizon:

A. Short-range plans – are plans to cover a period of less than a year.

Supervisors and section are mostly in-charge with these plans.
Operational plan can also be considered as short-range plan

B. Long-range plans – these are plans which cover a period of more than one
year. These are carried out mostly by middle and top
management

3. Plans According to Frequency Use

A. Standing Plans - these are plans that are used again and again and they
focus on repeatedly recurring managerial situations

Standing plans are classified as follows:

1. Policies – they are broad guidelines to help managers decide on recurring

situations or functions at all levels

2. Procedures – these are plans which describe the exact set of measures to be
taken in a given situation

3. Rules – they are regulations that either allow or forbid a certain action

B. Single-Use Plans - these plans are designed primarily to incorporate steps

that are fairly new and unlikely to be replicated
.
Single-Use Plans may be further classified as follows:

1. Budget - is a plan that sets out the projected expenditure for a given activity
and explains where the required funds will come from.

2. Program - is a single use plan designed to coordinate a wide range of

activities

3.Project - a temporary effort to produce a unique product, service or outcome

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Figure 3: Example of Long Range and Functional Area Plan

(Source: https://www.business-plans.com/ten-year-business-plan)

Figure 4: Example of Short Range and Functional Area Plan:

(Source: https://www.morebusiness.com/marketing-plan-example/)

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Figure 6: Example of Standing Plan

(Source: http://s.casual.pm.s3.amazonaws.com/toolkit/ProposalExample.pdf)

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PURPOSE OF PLANNING

An article presented by C.W. Roney, explains that organizational planning has two
different purposes: the protective and the affirmative. Protective purpose of planning is to
minimize risk by reducing the uncertainties surrounding business conditions and clarifying
consequences of related management actions. ³ The affirmative purpose is to increase the
degree of organizational success. Firms may vary on how they look at their plan. Planning is
also use to link all the activities within the organization. But the basic purpose of planning is
to help the organization in achieving its objective.

PLANNING PROCESS

Different level of management may have different process for planning. But the
common process can be illustrated below:

Figure 7: The Planning Process

 Setting Plan / Organizational Goal

Planning process begins with the goal setting. The engineer manager defines
clearly the mission, vision, target and direction of the firm. Goal can either be for the
whole organization, for a certain department or a specific area or section. When
setting up the goal the engineer manager must consider the following:

 Specific and measurable

 Defined time period
 Cover key result areas
 Challenging but realistic
 Linked to rewards

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Example of goals are: increase of revenue by 30% for the fiscal year, decrease
of carbon footprints by 10% produce by the firm by the end of 2 nd quarter,
improvement of change over rate for model 12345 within 3 months and so on.

 Strategy and Tactics Development

Once the organizational goal is identified, the next step is to develop strategies
and tactics that would aid in realizing those goals. Strategical map and tactical plans
are carried out in these processes. Contingency plan is also created to effectively
respond to an unforeseen circumstance.

Example of strategies are: modify number of product model to increase

number of customer, implement recycling program for reduction of carbon footprints,
apply one box set-up to decrease change over time.

Short term actions such as customer survey and leasing a business office for a
certain project are examples of tactics.

 Determining Resources Needed

Factors needed for goal realization are identified, this may include the human
and non-human resources. Resources should be properly determined (quantity and
quality) to avoid excess or shortage cost in implementing the strategies and tactics.

Example of resource determination are: allocation of 5 million for the

production line of the new model, purchasing of 20 new machines and equipment for
installation in the new production line and hiring of additional 25 operators.

 Implementation of Plan

After resources are identified, the next step is to implement the plan. Tools to
execute the strategy include management by objective, results dashboards, and unified
transparency

Many companies have adapted management by objectives in in the

implementation goals, because they believe that they are well-oriented when they use
it. According to Peter F. Drucker, management by objective (MBO) “is a system used
by managers to define goals and use them to monitor subsequent performance.”

Performance dashboards are most of the time use to track the effectiveness of
the implemented activities. Dashboards varies depending on the area it will be use.
They are also use to view the real time process.

 Review and Monitor

Lastly, managers frequently review plans to learn from outcomes and change
plans as necessary as possible if needed. Planning and operational reviews are normally done
during this process.

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MAKING PLANNING EFFECTIVE:

Organizational goals are achieved once planning is effective. But sometimes plan
doesn’t work out the way they are planned. So, in order to make planning successful, the
engineer manager should observe the following:

1. Know the different barriers to planning

Planning barriers may include the following:

1. Manager’s planning ability is not suitable
2. Planning process is incorrect
3. Members are not engaged to the planning process
4. Gathered information are inappropriate
5. Too much focus on the present at the cost of the future
6. Dependent on the planning department
7. More focused on the controllable variable

2. Use of aids to planning

Planning aids may include but not limited to, involving member in the
planning process, gathering of more and appropriate information and to develop
different information sources.

PLANNING TOOLS:

There are many planning tools available that the managers can use. Two of
these common tools are:

1. Forecasting - is the method of forecasting potential environmental

conditions that will affect the activity of the organization

Types of Forecasting:

 Qualitative
Jury of executive opinion
Salesforce Estimation
 Quantitative
Moving Average
Regression

2. Scheduling - process of drawing up a comprehensive list of the tasks to be

carried out in order to achieve the objective, the allocation of
the resources required to achieve the objective, and the
development and follow-up of time tables for the achievement
of the objective

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Scheduling Techniques:

 Gannt Charts - scheduling device developed by Henry L. Gantt,

which is presented by a bar graph with time on the horizontal axis
and the resources on the vertical axis. Normally used for resource
scheduling resources such as human resources and machines

Figure 8: Gannt Chart Example

 PERT (Program Evaluation and Review Technique) - is a

scheduling method that stresses the interrelationship of tasks.

Figure 9: PERT Example

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PROGRESS CHECK

A Discuss briefly the following (2 points each)

1. Define planning?

2. Enumerate the different steps in planning process?

3. Differentiate strategic and operational plan. Give example

4. Why planning is considered to be the most significant function the engineer

manager? Explain.

5. Enumerate the different types of plans and their usage

6. What are different barriers in planning?

7. What are the things to consider in setting the goal?

8. Identify the types of forecasting

9. What are the different components of a Gannt chart

10. Give the different aids that can be used for making planning effective?

B. Activity and item for research: (5 points each)

1. Using a Gannt chart, create your 10-year future plan

2. Interview an engineer manager and inquire regarding the different activities in

planning that they consider. Create a reaction paper and present the result of the interview.

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LEARNING GUIDE

Week No.: __4__

TOPIC/S

 ORGANIZING FUNDAMENTALS AND CONCEPT

 IMPORTANCE OF ORGANIZING AS MANAGEMENT FUNCTION

 ORGANIZING PROCESS

 ORGANIZATIONAL STRUCTURES AND ITS TYPES

 DIFFERENT TYPES OF DEPARTMENTALIZATION

EXPECTED COMPETENCIES

Upon completing this Learning Module, student will be able to:

1. describe the fundamentals and concept of organizing;

2. illustrate the types of organizing and its application;
3. classify different types of structure and departmentalization; and
4. develop an organizational structure as per plan from previous topic

CONTENT/TECHNICAL INFORMATION

The organization of the industry affects how the firm operates. The managers skill to
organize impart largely on the success of the department, area or the business. Managers can
create the structure of organization depending on what they believe will work in the present
situation. However, the engineer manager can reorganize the structure once the existing is not
effective and applicable anymore.

ORGANIZING DEFINE

Organizing is define as “a management function which refers to the structuring of

resources and activities to accomplish objectives in an efficient and effective manner."¹
Organizing is basically use for plan implementation. The allocation of resources to a specific
area or department and to the specific person are carried out during process. A primary focus
of organizing is determining what individual employees will do in an organization and how
their individual efforts should best be combined to advance the attainment of organizational
objectives.²

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ESSENCE OF ORGANIZING AS MANAGEMENT FUNCTION

The role of organizing is extremely important for the management system since it is
the driving mechanism used by engineer managers to initiate the plan. Organizing creates and
manages relationships between all organizational resources by specifying the tools to be used
for different tasks and when, when and how to use them. If organizing is properly created,
cost of operation can effectively be managed since allocation of resources is appropriate.
Duplication and idle of resources can avoided.

ORGANIZING PROCCESS:

Figure 1: Organizing Process

The first process of organizing is to understand the plan and goals of the organization,
this is to ensure that the engineer manager translate clearly what the organization wants to
achieve. Otherwise, if the plan is misinterpreted, the structure they created might not
contribute on the achievement of plans. The next two steps include the creation of the major
tasks and subdividing them, this is to administer the specific activities in the structure.
Resources allocation to the sub-tasks is the next process. Proper distribution of resources
should be taken care on this process. Lastly is the evaluation and feedback. Evaluation should
take place to check whether or not the organizing strategy is effective. Feedback should
constantly be done to assess the organization status.

ORGANIZATIONAL STRUCTURE:

Organization are basically represented by a structure. Structure is the output of

organizing. It shows how the relationship of positions are being arranged. Its purpose is to
facilitate the use of each resource, individually and collectively, as the management system
attempts to attain its objectives⁴. An engineer manager should properly select the best
structure that could fit on the organization’s objectives.

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TYPES OF STRUCTURE:

1. Formal Structure - is defined as the relationships between organizational resources

as outlined by management. This structure is represented by an organizational
chart, organizational manual, or policy manual.

 Organization Chart - is a diagram of the official positions and formal lines

of authority of the organization

 Organizational Manual - details the outline of the relationships between the

authorities, describes the roles of the major organizational units, and
explains the work procedures.

 Policy Manuals - describes the organizational practices and strategies of the

company

Purpose of the formal structure:

 It determines the relationships for individuals and departments between tasks

and authority

 It describes hierarchical reporting relationships, the number of levels in the

organization's hierarchy and the scope of controls

 It describes organizational groupings of individuals into divisions and

departments

 It specifies the framework for effecting effort coordination in both vertical

(authority) and horizontal (task) directions.

2. Informal Structure - defines as the formation of relationships that grows because of

the informal activities of members in the organization. This is normally
formed because of the following factors:

 Friendship
 Common Interest
 Proximity
 Collective Power
 Group Goals

Informal structure can be useful if engineer manager could utilize it properly,

but could also be destructive if neglected.

FACTORS TO CONSIDER WHEN STRUCTURING AN ORGANIZATION:

1. Division of labor – determines the type and scope of work and how they are
integrated into a job. This is also called work specialization, where many
believes that tasks can be perform efficiently if the work is specialized

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2 Delegation of authority – the method of allocating subordinates to varying degrees

of decision-making authority. It is also called the chain of command, an
unbroken line of authority connecting all individuals within an entity and
showing who reports to whom. The chain of command illustrates the
authority, responsibility and delegation. Authority is the legitimate right of the
manager to make decisions. Responsibility is the commitment to execute the
task or function as assigned. Accountability is a system by which authorities
and obligations are put in together. All workers regardless of the position
should be accountable for every task they perform.

Types of authority:

1. Line authority – a manager's right to tell his employees what to do

and then see them doing it

2. Staff authority – specialist’s or experts right to advice to superior

3. Functional authority – the right of a professional to supervise the

lower level of personnel engaged in that discipline, regardless
of where the worker is in the organization

3. Departmentalization – grouping similar employees, tasks or processes into main

organizational sub-units

TYPES OF DEPARTMENTALIZATION:

 Departmentalization based on Function - organization structure is based

on the function of work, example marketing, finance, operation,
etc.

Figure 1: Example of Departmentalization based on Function

 Departmentalization based on Product or Service- structure is based on

the different products produced or services provided by the
firm

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Figure 2: Example of Departmentalization based on Product

 Departmentalization based on Geography - structure is based on the

territorial assignment of where the work is done

Figure 3: Example of Departmentalization based on Geography

 Departmentalization based on Customer - structure is based on the

different customers catered by the company

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Figure 4: Example of Departmentalization based on Customer

 Departmentalization based on Matrix - structure is based on the

combination of two structures, in which the worker reports to
both the functional or division manager and to the project
manager. This structure normally borrows workers from other
divisions

Figure 5: Example of Departmentalization based on Matrix

(Source:https://marketbusinessnews.com/financial-glossary/matrix-
organization-definition-meaning/)

New Types of Departmentalization:

 Team Approach - recently the most common trend that is used in

departmentalization. Since most of the previous departmentalization
are mostly vertical in approach, the relay of communication and
decisions would sometimes take so long. These approach offers
managers a way to delegate power, move accountability down to lower
levels and be more agile and sensitive in a dynamic global
environment. With a team-based structure, the entire organization
consists of horizontal teams which organize their work and work
directly with clients to achieve the goals of the organization

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Figure 6: Example of Team Approach Departmentalization

 Virtual Network Approach - The new departmentalizing strategy expands

the concept of horizontal collaboration and communication
across organization's borders. This strategy ensures that the
corporation subcontracts much of its main tasks to independent
companies and manages its operations from a limited head
office

Figure 7: Example of Virtual Network Approach Departmentalization

4. Span of Control – the number of workers directly reporting to a certain manager or

head. This characteristic of structure determines how closely a supervisor
can monitor subordinates. In the past years, the span of control for a certain
manager is only limited up to 7 to 8 persons, but presently you can see as high
as 30 persons under one manager or superior.

Factors Influencing Span of Control:

 Similarity of function
 Geographic Contiguity
 Complexity of function
 Coordination
 Planning

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5. Coordination – the linking of activities within an organization that serve a shared

goal or purpose

COMMITTEE:

Committee - is a structured group of individuals organized for a particular

purpose

Classification of Committees:

1. Ad-hoc committee – type of committee which is developed for a short-term

purpose and with limited life. Example of these are: program
committee, food committee and so on

2.Standing committee – is a defined as a systematic committee which

constantly deals with issues. Example of these committees are: safety
committee, environmental committee, kaizen committee and the like.

PROGRESS CHECK

A. Discuss briefly the following (2 points each)

1. How important is it for the engineer manager to acquire skill in organizing?

2. Organizing define?

3. Enumerate the factors influencing the informal group?

4. What are the different types of authority? How do they differ to the other?

5. Enumerate the process of organizing? Why is understanding of plan essential in

the creation of structure?

6. Identify the different purposes of structure?

7. Define the different classifications of committee?

8. Does the organizational chart represent the type of organization the company
had? Why?

9. What are the factors influencing the span of control?

10. Different things to consider in structuring an organization?

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for EDUCATIONAL PURPOSES ONLY and is NOT FOR SALE NOR FOR REPRODUCTION.