04. Engineering Management 1 - Introduction to Management Thinking

Introduction

Understanding the basic principles of managing:

• People
• Groups and teams
• Organizations
• Finances
• Projects

Is essential for competent engineers.

Definition of management:

Management is getting things done in organizations through people.

Mary Parker Follet

Taking inputs and optimizing the transformation process.

Environment/         The organization       The environment
resource inputs      creates                consumes/product
                                            output
People               Workflows turn         
Money                resources into         Finished goods
Materials     ---->  outputs        ---->   and/or services
Technology                                        |
Information          (transformation              |
     ^                process)                    |
     |                                            |
     ----------------------------------------------

Leads to

Systems theory of organization:

• Organizations are systems
• Systems are sets of interrelated parts operating as a whole in pursuit of a common goal
• Has four major components: inputs, transformation processes, output, feedback

The Process of Management

Before getting things done, the following must be established:

• What is the purpose of the organization (vision, mission)
• Why is the organization pursuing the vision?
• How will the organization achieve the vision (strategy)

Vision and mission: organization's purpose
                   |
                   | leads to
                   v
Strategy: how the objectives will be achieved
                   |
                   | leads to
                   v
Implementation: resource allocation, operations needed 
                to fulfil the strategy

Challenges

• Productivity
• Efficiency
• Customer sat
• Profitability (or other performance indicators)

But recently also:

• Sustainability
• Equity/diversity
• Continuous change

Roles of a Manager

POLC:

• Planning: setting performance objectives and deciding how to achieve them
• Organizing: arranging tasks, people and other resources to accomplish the work
• Leading: inspiring people to work hard to achieve high performance
• Controlling: measuring performance and taking action to ensure desired results

Organising

Structuring an organization and creating conditions/systems where people/resources work to gether to achieve organizational goals:

• Resource allocation, task allocation, creating procedures, policies, processes
• Organizational structure with clear lines of authority/responsibility
• Recruitment, training
• Allocating employees where they will be most effective

Leading

Creating a vision and guiding/training/coaching/motivating others:

• Guiding/motivating others
• Giving assignments
• Explaining routines/procedures/policies
• Providing performance feedback

Planning

Anticipating trends, determining the best strategies/tactics to achieve organizational goals/objectives:

• Setting organizational goals
• Developing strategies
• Determining resources
• Setting standards

Controlling

Determining if an organization is progressing towards goals/objectives, and taking corrective actions if required:

• Measuring results against objectives
• Monitoring performance relative to standards
• Rewarding outstanding performance
• Taking corrective action

Management Skills

• Technical skills; applying expertise on technical tasks
• Human/interpersonal skills; working in cooperation with others
• Conceptual skills; analytic thinking to solve problems

Higher level managers concentrate more on conceptual skills, but human skills are important regardless of level.

How to Manage

History

Classical Theories

Telling people what to do, motivating them with money.

Scientific Management

Improving the workers, watching the workers all the time to ensure they don’t mess it up. Punish the bad, reward the good.

Engineering the most efficient production methods.

• Developing a science for each element of the job
• Selecting employees and training them to do the job as described
• Supervising employees to ensure they follow the prescribed methods
• Continue to plan the work but use workers to get the work done

Gaant chart: splitting tasks down into smallest components and showing dependencies.

Administrative Management

Improving the manager by applying ‘universal principles’ of efficient management.

• Henri Fayol, 5 duties of management: foresight, organization, command, coordination, control
• Mary Parker Follet: if you share goals with workers, they are likely to help and reduce management conflict
• Chester Barnard: ensuring overlap between natural/informal organization and organizational hierarchy; acceptance theory of authority

Bureaucratic Management

Improving efficiency by developing the ‘ideal’ organization.

Max Weber:

• Clear division of labour
• Clear hierarchy of authority
• Careers based on merit
• Formal rules and procedures
• Impersonality

Behavioral Management Theories

Mayo Hawthorne Studies:

• Gas vs electric lighting; electric companies began market that more factory lighting led to improved efficiency
  • Both experimental and control groups had improved efficiency
  • Tried decreasing lighting levels of control groups; both groups had same efficiency increases
  • Workers were excited about the experiment and worked harder
  • Standardized processes led to boredom; freedom led to workers finding more efficient methods of doing work and higher output
• Conclusions
  • Workers have needs other than money
  • Recognition, security, sense of belonging effects workers’ morale and productivity

Maslow’s hierarchy of needs; needs have to be satisfied in order of:

• Physiological: food, water etc.
• Safety: of body, employment, family etc.
• Love/belonging: friendship, family, sexual intimacy
• Esteem: confidence, achievement, respecting others/respect by others
• Self-actualization: morality, creativity etc.

If a need is satisfied, it will no longer motivate people.

At work:

• Physiological: adequate salary and working conditions
• Safety: job security, safe working conditions
• Social: happy work team, friendly, healthy workplace relationships
• Esteem: helping others reach their potential, giving recognition, giving others recognition and responsibility
• Self-actualization: challenging, creative work

McGregor; Theory X/Y:

• Theory X Managers:
  • Average humans inherently dislike work and will avoid it
  • Hence they must be coerced, controlled or otherwise threatened with punishment
  • They which to be directed, avoid responsibility, have little ambition, and want security
• Theory Y Managers; humanistic approach:
  • Work is natural; people do not dislike it
  • External control/threats are not the only way to get people to work towards the organization’s objectives
  • People seek responsibility
  • Capability to exercise a high degree of imagination/creativity is widely distributed
  • Intellectual potentials of the average person only partially utilized

Human resource approach: people are social and self-actualizing. X/Y acknowledges that only some people are, and that good managers should be able to identify workers as such and treat them accordingly.

• Let people participate in deciding what to do
• Give responsibility where appropriate
• Money alone is not a sufficient motivator

Quantitative Management Theories

Modern management theory

Theory Z: combination of American and Japanese (LEAN) management styles

Contingency theory: no universal principle, use contingency principles instead; appropriate managerial actions depend on the situation.