Engineering Management

1. Engineering Management
Introduction to Management

2. 2
Recommended Text & Reference Books:
1. FUNDAMENTALS OF MANAGEMENT:
Essential Concepts & Applications
By: Robbins, Decenzo
2. MANAGEMENT: The New Competitive
Landscape
By: Bateman, Snell
3. MANAGEMENT 7th Edition
By: Robbins, Coulter
4. MANAGEMENT: A global Perspective
By: Weilrich, Koontz

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Management Key Concept
 Organizations
 A group of individuals who work
together toward common goals.
 A social entity, which is goal
oriented and deliberately
structured.
 Goal
 A desired future condition that
the organization seeks to
achieve.
 Management
 The process of using
organizational resources to
achieve the organization’s goals.

4. 4
Management Key Concept
 Process
 Ongoing functions or primary
activities engaged in by
managers.
 Resources
 Are organizational assets and
include:
 Man
 Machine
 Material
 Money and
 Information
 Manager
 Someone who uses resources
efficiently and effectively to
achieve the goals.

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Management Key Concept
 Measuring Managerial Performance
 Efficiency and effectiveness are the
measures of managerial or
organizational performance.
 Efficiency – Using the fewest inputs
to generate a given output
 “doing things right”
 Focuses on
 means and
 achieving the objectives in time.
 Effectiveness – Pursuing the
appropriate goals and checking
degree to which they are achieved
 “doing right things”
 Focuses on
 end results and
 achieving the objectives on time.

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High
Low
Poor Good
Effective but not
efficient.
Some resource are
wasted.
Effective & efficient.
Goals are achieved &
resource are well
utilized.
Area of high
productivity
Neither effective nor
efficient.
Goal are not achieve.
Resource wasted in
the process.
Efficient but not
effective.
No resource is
wasted but goals are
not achieved.
Resource utilization
Goalattainment
Measuring Managerial Performance

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Different Contexts of Defining Management
 Management can be defined from four different
contexts
 Production-or efficiency-oriented
 Management is the art of knowing what you want
to do and then seeing that it is done in the best
and cheapest way.
 Decision-oriented
 Management is simply the process of decision
making and controlling over the action of human
beings for the expressed purpose of attaining
predetermined goals.
 People-oriented
 Management is the art of getting things done
through and with other people.
 Function-oriented
 To manage is to forecast and to plan, to organize,
to coordinate and to control.

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Management: Is it Science or Art?
 Science is a collection of systematic knowledge, truths and
inferences originated from continuous study and
experiments.
 It has a number of mathematically oriented techniques
discovered either within the field or adapted from other
fields.
 Art uses the known rules and principles and uses the skill,
expertise, wisdom, experience to achieve the desired
result.
 Management has got
 scientific principles which constitute the elements of
Science, and
 Skills and talent which are attributes of Art.
 Management has got two faces like a coin;
 on one side it is art, and
 on the other it is science.
Management is both art and science.

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Importance of Management
 Management is critical element
in the critical growth of the
country.
 Management is essential in all
organized effort, be it business
activity or any other activity.
 Management is the dynamic,
life giving element in every
organization.

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Concept of Management
 The term management is used in three
alternative ways:
 Management as a discipline
 Refers to a set of management principles,
techniques and functions etc.
 Management as a group of people
 Refers to Individual or a group of people who
performs managerial activities.
 Management as a process.
 consisting of planning, organizing, actuating
and controlling that are performed to decide
the organizational objectives and achieve
the same by the use of human and other
resources.

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Functions of Management
 Planning
 A process of setting the organization goals and
charting out the best way of action for
achieving the same.
 Includes determination of
 what is to be done,
 how, and where it is to be done,
 who will do it, and
 how result are to be evaluated.
 This function
 is expected to be carried out throughout the
organization.
 should be performed by the managers at all
levels.

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Functions of Management
 Organizing
 According to Allen, organizing refers to a systematic
process of structuring, integrating, coordinating task
goals, and activities to resources in order to attain
objectives.
 Organizing includes
 identifying and grouping the activities,
 defining and delegating responsibility and authority,
and
 establishing relationships.
 To organize a business is to provide it with everything
useful to its functioning i.e. personnel, raw materials,
machineries, capital etc.
 Once objectives are set, manager has to develop a plan
to achieve them with help of human resources as well as
material resources.

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Functions of Management
 Directing
 Directing involves communication, leadership
and motivation.
 Communication
 The process of passing the information
from one person to other personal
understanding it.
 Leadership
 The function whereby the person or
manager guides and influences the work
of his subordinates.
 The ability to influence people towards
the attainment of organization goals.

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Functions of Management
 Leadership
 Leadership is of three types:
 Autocratic Leadership
 Leader retains full authority for decision making
 Democratic /Participative Leadership
 The leader accept some employees input but usually use
their authority to make decision
 The leader
 delegates authority to others,
 encourages participation and
 relies on expert and referent power to influence
subordinates
 Free –rein Leadership
 The leader delegates much authority to employees.
 Motivation
 The process of creating organizational condition that will
result in employees’ striving and working toward the company
goals.
 It means motivating the employee to give their best to the
organization

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Functions of Management
 Controlling
 The controlling involves
 Establishing standards of performance.
 Measuring current performance and comparing it
against the established standard to identify the
deviation.
 Taking corrective action that does not meet the
standard.
 Control compels the events to confirm to plans.
 Innovation and Representation
 These are also two important additional managerial
functions.
 Innovation means crating new ideas which may either
result in the development of new products or finding new
uses for older ones.
 It is necessary to grow better.
 The manger has to represent himself for the
organization.
 A manger must win support effectively from different
groups (either internal or external).

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LEVELS OF MANAGEMENT
• LOWER LEVEL (FIRST LINE):
FOREMEN & WHITE COLLAR
SUPERVISOR
• MIDDLE MANAGEMENT:
SALES MANAGERS,
PERSONNEL MANAGERS,
OTHER DEPARTMENTAL
HEADS.
• TOP MANAGEMENT:
COMPANY PRESIDENTS,
EXECUTIVES, VICE
PRESIDENTS
Top
Managers
Middle
Managers
First-line Managers
Non-management

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Levels of Management
 First-line Managers/ Lower Level
Manager
 Direct operating employees only,
 They do not supervise other
managers.
 Middle Level Manager
 Direct the activities that implement
their organization policies.
 Balance the demands of their
superiors with the capacity of their
subordinates.
 Top Level Manager
 Responsible for the overall
management of the organization.
 Establish operating policies.
 Guides the organization’s
interactions with its environment.

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Managerial Skills
Primary Skills
• Conceptual Skill
• Human Skill
• Technical Skill
Secondary Skills
• Decision Making Skill
• Communication Skill
• Leadership Skill
Managerial Skill

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Managerial Skill
 Conceptual Skills (Analytical Skills)
 The ability to
 analyze complex situations and
 respond effectively to the challenges faced by the
organization.
 Interpersonal Skill( Human Skill)
 The ability to work effectively
 with members of one’s workgroup as well as
 with other workgroups
within the organization.
 Technical Skills
 The ability to utilize
 tools,
 techniques and
 procedures
that are specific to a particular field.
 Decision Making Skill
 The ability to make a good decision.

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Skill Requirements at Different Levels

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Planning
Planning
Planning
Organizing
Organizing
Organizing
Staffing
Staffing
Staffing
Directing
Controlling
Directing
Directing
Controlling
Controlling
Top
Managers
Middle
Managers
First-Line
Managers
Least
Important
Most
Important
Importance of Management Functions at Different
Levels
 Staffing
 The process of filling the positions in the organization and
keeping them filled.
 The process of recruiting and selecting the right person for
the right job at the right time in the right place.

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 A set of expectation for a manager’s behaviors.
 In 1960, Henry Mintzberg conducted a study to understand about the
managerial roles.
 He identified 10 managerial roles that are common to all managers.
 These 10 managerial roles are grouped under
 Interpersonal,
 decisional, and
 informational roles.
Managerial Roles
Roles of Manager
Interpersonal
• Figurehead
• Leader
• Liaison
Informational
• Monitor
• Disseminator
• Spokesperson
Decisional
• Entrepreneur
• Disturbance handler
• Resource allocator
• Negotiator

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Managerial Roles
 Interpersonal Roles
 Help the managers in managing the organization
smoothly.
 Figurehead
 Managers may have to appear at community
function, attend social events and signing legal
documents
 Leader
 Responsibility for the success/failure of their
work groups.
 A person responsible for hiring, training and
motivating subordinates in organization.
 Liaison
 A person who perform and interacts with other
people outside the organizations.

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Managerial Roles
 Informational Roles
 Responsible for ensuring that the people with whom
they work have sufficient information to do their
jobs effectively.
 Monitor
 Managers seek out information from their
subordinates.
 Disseminator
 Information receive internally/externally will
be transmitted to the subordinates.
 Spokesperson
 Transmits information to the people who are
external to the organization, i.e., government,
media etc.
 Must often communicate information to
individuals outside their units and their
organizations.

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Managerial Roles
 Decisional Roles
 Managers’ responsibility for processing information
and reaching conclusions.
 Entrepreneur
 Managers initiates projects that capitalize on
opportunities.
 Disturbance Handler
 Managers is responsible for corrective actions
when the organizations faces important and
unexpected disturbances.
 Resources Allocator
 Managers is responsible in allocating the
resources of the organizations.
 Negotiator
 Managers may negotiate with employees,
suppliers, customers or other workgroups.

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Evolution of Management Theory
 The classical management theories emerged around the start of
the twentieth century. These include
 scientific management, which focuses on matching people and
tasks to maximize efficiency, and
 administrative management, which focuses on identifying the
principles that will lead to the creation of the most efficient
system of organization and management.
 Behavioral management theories, developed both before and after
the World War II,
 focus on how managers should lead and control their
workforces to increase organizational performance.
 Management science theory, developed during the World War II,
has become more important as researchers have developed
rigorous analytical and quantitative techniques to help managers
measure and control organizational performance.
 Theories, developed during the 1960s and 1970s, help explain how
 the external environment affects the way organizations and
managers operate.

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Chronological Development of Management
Perspectives

28. 28
Classical Management Theory
Focuses on the
individual
worker’s
productivity
Focuses on the
functions of
management
Focuses on
the overall
organizational
system

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Scientific Management
 Defined by Frederick Taylor during the early 19th century.
 The systematic study of the relationships between people and
tasks to redesign the work for higher efficiency.
 Taylor believed that
 the production process would become more efficient if the
amount of time and effort that each employee spent to produce
a unit of output could be reduced.
 On the basis of his experiments and observations, he developed
four principles to increase efficiency in the workplace:
1. Study the way the job is performed now & determine new ways
to do it.
 Gather detailed time and motion information.
 Try different methods to see which one is best.
2. Codify the new method into rules and standard operating
procedure.
 Teach all workers.
3. Select workers whose skills match the rules set in Step 2.
4. Establish a fair/acceptable level of performance and pay for
higher performance.
 Workers should benefit from higher output.

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Scientific Management
 Contributions of Scientific Management
 The modern assembly line pours out finished products
faster than Taylor could ever have imagined. This
production "miracle" is the gift of scientific
management.
 Its efficiency techniques are nowadays applied to many
tasks in non-industrial organizations, ranging from fast-
food service to the training of surgeons.
 Limitation of Scientific Management
 Workers felt that as their performance improved,
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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Administrative Management Theory
 The study of creating an organizational structure that leads to high
efficiency and effectiveness.
 Two of the most influential views regarding the creation of
efficient systems of organizational administration were developed.
 The Theory of Bureaucracy
 Fayol’s Principles of Management
 The Theory of Bureaucracy.
 Max Weber, a German sociologist and historian, developed the
principles of bureaucracy.
 As a formal system of organization and administration designed
to ensure efficiency and effectiveness.
 Focuses on the overall organizational system.
 The most important means of controlling over human beings.
 Bureaucratic management is based upon:
 Division of labor
 Hierarchy of authority
 Rules and procedures
 Impersonality
 Employee selection and promotion

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The Theory of Bureaucracy
 Principles of Bureaucracy
 Principle 1: In a bureaucracy, a manager’s formal authority
derives from the position he or she holds in the
organization.
In a bureaucratic system of administration, obedience is owed to a
manager,
 not because of any personal qualities that he or she might possess—
such as personality, wealth, or social status
 but because the manager occupies a position that is associated with a
certain level of authority and responsibility.
 Principle 2: In a bureaucracy, people should occupy
positions because of their performance, not because of
their social standing or personal contacts
This principle was not always followed in Weber’s time and is often
ignored today. Some organizations and industries are still affected by
social networks in which personal contacts and relations, not job-related
skills, influence hiring and promotional decisions.
 Principle 3: The extent of each position’s formal authority
and task responsibilities, and its relationship to other
positions in an organization, should be clearly specified.

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 Principles of Bureaucracy
 Principle 3: The extent of each position’s formal authority
and task responsibilities, and its relationship to other
positions in an organization, should be clearly specified.
When the tasks and authority associated with various
positions in the organization are clearly specified,
 managers and employees know what is expected of them
and what to expect from each other
 employees are strictly accountable for their actions when
each person is completely familiar with his or her
responsibilities.
 Principle 4: For authority to be exercised effectively in an
organization, positions should be arranged hierarchically.
This helps employees know
 who reports to whom and
 to whom managers and employees should go if conflicts or
problems arise.
The Theory of Bureaucracy

34. 34
 Principles of Bureaucracy
 Principle 5: Managers must create a well-defined system
of rules, standard operating procedures (SOPs), and
norms so that they can effectively control behavior
within an organization.
Rules, SOPs, and norms provide behavioral guidelines that
improve the performance of a bureaucratic system because
they specify the best ways to accomplish organizational
tasks.
 Rules are formal written instructions that specify actions
to be taken under different situations to achieve specific
goals.
 SOPs are specific sets of written instructions about how
to perform a certain aspect of a task.
 Norms are unwritten, informal codes of conduct that
prescribe how people should act in particular situations.
The Theory of Bureaucracy

35. 35
The Theory of Bureaucracy

36. 36
 Contributions of Principles of Bureaucracy
 No confliction among job duties
 Promotion is based on experience and merits.
 Employees are bound to follow rules and
management process becomes easy
 Division of labor helps workers in becoming
experts.
 Limitations of Principles of Bureaucracy
 System suffers from too much of red tape and
paper work.
 Human factor is neglected due to excessive
emphasis on rules
 Employees don’t develop belongingness to the
organization
 Employees resist change.
The Theory of Bureaucracy

37. 37
 Working at the same time as Weber but independently,
Henri Fayol developed a set of 14 general principles of
management.
 He believed that these are essential to increasing the
efficiency of the management process.
 These principles remain as foundation of modern
management theory.
 Recent researchers have refined or developed them to suit
modern conditions.
 Fayol’s 14 Principles
1. Division of Work
Work should be divided among individuals and groups to ensure that
effort and attention are focused on special portions of the task.
 Fayol presented work specialization as the best way to use the
human resources of the organization.
 Job specialization and the division of labor increase efficiency,
especially if managers take steps to lessen employees’ boredom.
Administrative Management: Fayol’s 14 Principles

38. 38
Fayol’s 14 Principles
2.Authority and Responsibility
Managers have the right to give orders and the power to exhort
subordinates for obedience.
Responsibility arises wherever authority is exercised and is
therefore naturally associated with authority.
3.Unity of Command
An employee should receive orders from only one superior.
A sub-ordinate should be accountable to one and only one boss
at a time.
4.Unity of Direction
The organization should have a single plan of action to guide
managers and employees.
Without unity of direction, unity of action cannot be achieved.
5.Equity
All organizational members are entitled to be treated with justice
and respect.
All employees should be treated as equally as possible.
Administrative Management: Fayol’s 14 Principles

39. 39
Fayol’s 14 Principles
2.Authority and Responsibility
Managers have the right to give orders and the power to exhort
subordinates for obedience.
Responsibility arises wherever authority is exercised and is
therefore naturally associated with authority.
3.Unity of Command
An employee should receive orders from only one superior.
A sub-ordinate should be accountable to one and only one boss
at a time.
4.Unity of Direction
The organization should have a single plan of action to guide
managers and employees.
Without unity of direction, unity of action cannot be achieved.
5.Equity
All organizational members are entitled to be treated with justice
and respect.
All employees should be treated as equally as possible.
Administrative Management: Fayol’s 14 Principles