View File - University of Engineering and Technology, Taxila

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ENGINEERING MANAGEMENT

Management & Its Functions

Definition of management

Functions of management

Management Skills

Management Types

What it is like to be a manager

Environment of Management

Value Systems and Management

Philosophy of management

Role of Objective Management

Planning

Decision Making

Heirarchy of Plans

Management Objectives

Tools in Developing Good Strategies

Organizing & Staffing

Definition

Structures of formal organization

Principles of organization

The Art of Delegation

Situational Approach to Human Resource

Management

Performance Appraisal

Career Strategies

Communicating & Controlling

Communication Flow in the organization

Barriers to Communication

Non-Verbal Communication

Essential Elements of a Control System

Principles of controlling

The PDCA Cycle

Leading

Elements of Leadership

Types of Leadership

Motivation Theories

Seven Basic Habits of Highly

Effective People

Management & Its Functions

Management

– process by which selected people design and maintain an environment in which individuals working together in groups, efficiently accomplish specific objectives and goals.

Management & Its Functions

Management

– attainment of organizational goals in an effective and efficient manner through planning, organizing , leading and controlling organizational resources.

Management & Its Functions

Productivity

– output-input ratio within a time period with due consideration for quality

Input

- labor, capital, materials

Output

– refers to products with higher quality, cheaper price, higher yield, simpler process, etc.

Management & Its Functions

Productivity improvement through:

1. Inc O , same I

2. Dec I , same O

3. Inc O , dec I

Management & Its Functions

Effectiveness

– attainment of objectives – “getting the job done”

Efficiency – attainment of ends with least amount of resources

Management & Its Functions

Management is…

- an economic resource

- a system of authority

- a class and status system

Management & Its Functions

Roles of a Manager ( H. Mintzberg)

Informational

Monitor, Disseminator , Spokeperson

Interpersonal

Figurehead, Leader, Liason

Decisional

Entrepreneur, Disturbance handler,

Resource Allocator, Negotiator

Management & Its Functions

Three Fundamental Skills of Managers (R.Katz)

Technical

Human

Conceptual

Management & Its Functions

Conceptual

Skills

Human

Skills

Technical

Skills

Management Level

Top Managers

Middle Managers

First-Line Managers

Non-Managers

Management & Its Functions

Three Important Factor in Developing Managers

(Charles E. Summer)

Knowledge Factors

ideas , concepts, principles

Attitude Factorsbeliefs,feelings,desires,values

Ability Factorsskill, art,judgement,wisdom

Ethical and Environmental Foundations of Management

Four Important Social Institutions Affecting Value

Systems of Management

Family

Educational System

Church

Government

Ethical and Environmental Foundations of Management

Four Schools of Thought Relative to Social Responsibility

1. Profit maximization as socially desirable

2. No long-run conflict between corporate and social responsibility.

3.

Improvement of one’s own organizational behavior best leads to social betterment

4. Management as trustee

Ethical and Environmental Foundations of Management

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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

Ethical and Environmental Foundations of Management

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Value Systems and Management

Two approaches to moral questions:

Natural Law

Situational Ethics

Three Types of Men According to source of moral direction: (David Riesman)

1. Tradition – directed

2. Inner directed

3. Other directed

Ethical and Environmental Foundations of Management

Conflict of Six Kinds of Moral Values

Integrity

Self-respect

Rationality of individual

Peace of mind

Lawfulness

Precedents

Customs

,Contracts,

Authorization

Harmony

Logical Consistency

Platonic Justice

Order,Plan

Common Good

A C T I O N

Survival

Political Power

Effect on friendfoe relations

Happiness

Desirable results

Maximized

Satisfactions

Efficiency

Loyalty

Institutional

Trend

Social Causes

Ethical and Environmental Foundations of Management

Total Corporate Social Responsibility

Discretionary

Responsibility

Ethical

Responsibility

Legal Responsibility

Economic Responsibility

Contribute to the community and quality of life

Be ethical . Do what is right. Avoid harm

Obey the law.

Be profitable.

Ethical and Environmental Foundations of Management

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 the firm 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.

Ethical and Environmental Foundations of Management

Total Corporate Social Responsibility

Discretioanary

Responsibility

Ethical Responsibility

Legal Responsibility

Economic Responsibility

Planning - Decision Making

Decision Making

- process of identifying problems and opportunities and then resolving them.

Decision - refers to the choice made from available alternatives.

Planning - Decision Making

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.

Planning - Decision Making

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.

Planning - Decision Making

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, alternatives are difficult to define, and information about outcomes is unavailable.

Planning - Decision Making

Condition that affect the Possibility of Decision Failure

Organizational Problem

Low

Certainty

Programmed

Decisions

Risk

Possibility of Failure

Uncertainty

Problem Solution

High

Ambiguity

Non-Programmed

Decisions

Planning - Decision Making

Decision Making Models

Classical Model

– based on the assumption that managers should make logical decisions that will be in the organization’s best economic interests.

Administrative Model

– describes how managers actually make decisions in situations characterized by non-programmed decisions,uncertainty and ambiguity ( descriptive, intuition)

Planning - Decision Making

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.

Planning - Decision Making

Model Classical Administrative Political

Problem/

Goals

Condition

Available

Information

Clear cut Vague Pluralistic, Conflicting

Certainty Uncertainty Uncertainty/Ambiguity

Full Limited Inconsistent,ambiguous

Choice

Rational choice Satisficing choice Bargaining & discussion by individual for resolving problem among coalition members for max. outcomes using intuition

Planning - Decision Making Steps

1.

Recognition of

Decision

6.

Evaluation and

Feedback

Implementation of

Requirement

Diagnosis

& Analysis

2.

of Causes

Decision-Making

Process

Development of

Chosen Alternatives

Alternatives

5.

3.

Selection of Desired

Alternatives

4.

Planning - Decision Making

Decision Making By Groups

Cooperative decision making – process by which group attempts to develop a composite organization mind.

Committeeany group interacting in regard to a common explicit purpose with formal authority delegated from an appointing executive.

Planning - Decision Making

Purposes of Commitees

For fact-finding , investigation, and collecting information

To avoid appearance of arbitrary decisions and to secure 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.

Planning - Decision Making

Purposes of Commitees

To distribute information

– to brief members of the organization on plans and facts

To provide representation organization .

for important elements of an

To coordinate different parts and subgroups organization toward common , overall goals.

of an

To train inexperienced personnel through participation of groups with experienced members.

Planning - Decision Making

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 can be 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

Planning - Decision Making

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

Planning - Decision Making

Decision Making Style

Directive

Analytical

Conceptual

Behavioral

Planning - Decision Making

Decision Making Style

Directive Style

- used by people who prefer simple, clear-cut solutions to problems

- for quick decisions, do not want lot of informations

- are generally efficient and rational, prefer to rely on existing rules

Planning - Decision Making

Decision Making Style

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

Planning - Decision Making

Decision Making Style

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

Planning - Decision Making

Decision Making Style

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

Planning - Decision Making

Decision Making Tools

Stochastic Methods

Simulation Techniques

Breakeven Analysis

Incremental Concept

Planning - Decision Making

Decision Making Involving Probabilities

1.

Decision maker should lay out all possible action /

2.

3.

seem reasonable to consider and all the possible outcomes of these actions.

State “ probability distribution “ projecting chances of each outcome that might result from each act.

Decision maker must use some quantitative yardstick of value that measures the value of each outcome. Calculate weighted average by using the assigned probabilities. Calculate EMVs.

Planning - Decision Making

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 a

Failure, there can be a loss of $300. Which brand should be stocked?

Planning - Decision Making

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

Stock Brand B

$200

$400

-$500

-$300

Planning - Decision Making

Expected Value Payoff Table

Strategy

Stock Brand A

Stock Brand B

State of Nature

Success Failure

$200x .80=$160 -$500x 0.20=-$100

EMV

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

$60

$50

Planning - Decision Making

Decision Tree

Alternatives

Brand A

Brand B

Outcomes

Success $200x .80=$160

Expected

Values

$60

Failure

-$500x 0.20=-$100

Success

$400x .50=$200

$50

Failure

-$300x 0.50=-$150

Planning - Decision Making

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.

Planning - Decision Making

Output

Planning and Strategic Management

Goals – desired future state of the organization.

Plan - a predetermined course of action

- blueprint specifying the resource allocations, schedules and other actions necessary for attaining goals.

Planning determining what organization’s goal and defining the means to achieve them.

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

Planning and Strategic Management

Elements of the Planning Process

1. Setting Primary and Intermediate Goals

2. Search for Opportunities

3. Formulators of Plans (conversion of opportunities into strategies and policies)

4. Target Setters

5. Follow- up of Plan

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7.

Planning and Strategic Management

Useful Generalization of Planning

A plan should be directed toward well defined objectives.

Plans made by different specialists should be coordinated through adequate communications among specialists.

Planning is a prerequisite to other functions of management.

Adaptation of plans to current actions demands continual redrafting of plans.

Planning pervades the heirarchy of an organization.

A manager should relate the degree of commitment of his resources to the need for definite plans.

Plans should retain flexibility

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Planning and Strategic Management

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Forecasting Techniques

- Quantitative time series analysis

Derived forecasts

Causal Models

Survey of plans and attitudes

Brainstorming

Delphi Method

Planning and Strategic Management

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Forecasting Techniques

- Quantitative time series analysis

Derived forecasts

Causal Models

Survey of plans and attitudes

Brainstorming

Delphi Method

Planning and Strategic Management

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Components of Strategic Management

Goals of Organization

Mission of Organizations

Strategy of Organization

Policies

Organizing and Staffing

Organizing – structure and process of job allocation ; job-oriented

Staffing – pertains to people; workeroriented

Organizing and Staffing

Classical Theory of Organization

Contributions:

Clear definition of types of formal organization

Certain generalizations that offer first approximations for planning an organization structure

Limited models for organizing activities

Organizing and Staffing

Types of Formal Organization

Line Organization

Staff Organization

Functional Organization

Organizing and Staffing

Types of Formal Organization

Line Organization heirarchy

- simplest, most direct type, observes

Staff Organization

– purely advisory (generalist/specialist) to the line structure, with no authority to place recommendations into action.

Functional Organizationscope of authority.

permits specialist in a given area to enforce directives within a limited and clearly defined

Organizing and Staffing

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

Organizing and Staffing

Comparison of the various types of organization

Staff Organization

Advantages:

- Enables specialist to give expert advice

- Frees the line executive of detailed analysis

- Affords young specialists a means of training

Disadvantages:

- Confuses organization if functions are not clear

- Reduces power experts –to place recommendations to action

- Tends toward centralization of organization

Organizing and Staffing

Comparison of the various types of organization

Functional Organization

Advantages:

- Relieves line executives of routine , specialized decisions

- Provides framework for applying expert knowledge

- Relieves pressure of need for large numbers of well rounded executives

Disadvantages:

- Makes relationships more complex

- Makes limits of authority of each specialist a difficult coordination problem

- Tends toward centralization of organization

Organizing and Staffing

Classical Principles of Organizations

Unity of Command

Exception Principle

Span of Control

Scalar Principle

Departmentation

Decentralization

Organizing and Staffing

Classical Principles of Organization

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

Exception Rule

– recurring decisions should be handled in a routine manner by lower level managers, whereas problems involving 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.

Organizing and Staffing

Classical Principles of Organization

Scalar Principle command”

- authority and responsibility should flow in a clear unbroken line from highest executive to the lowest. “chain of

Departmentation

– activities should be divided and formed into specialized 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.

Organizing and Staffing

Departmentation Criteria

Similar activities may be grouped together, based upon likeness of personal qualifications or common purpose

An activity may be grouped with other activities with which it is used, eg. Safety with Production

Functions may be assigned to the executive who is most interested in performing them well.

Activities may be grouped to encourage competition among departments or to avoid friction.

If it is difficult to make definite distinctions between two activities, they may be grouped together

Certain functions require close coordination and if separated , would increase problems of higher level managers; in this case they are grouped together.

Organizing and Staffing

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.

Organizing and Staffing

Staffing

Filling, keeping filled, positions in the organization which includes identifying the workforce requirement, recruiting, selecting, placing, promoting, training, appraising, compensating and planning for the general welfare of the employees.

Situational Approach to Human Resource Management

External Environment

1. Equal employment opportunity

2. Women in management

3. Staffing for international environment

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