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ORGANIZING TECHNICAL ACTIVITIES ENGINEERING MANAGEMENT

LECTURE 4
REASONS FOR ORGANIZING
Organizing is undertaken to facilitate the implementation of plans. In effective
organizing, steps are undertaken to breakdown the total job into more manageable
man-size jobs. Doing these will make it possible to assign particular task to particular
persons. In turn, these will help facilitate the assignment of authority, responsibility,
and accountability for certain functions and tasks.
ORGANIZING DEFINED
Organizing is a management function which refers to the structuring of resources and
activities to accomplish objectives in an efficient and effective manner.

The arrangement or relationship of positions within the organization is called the


structure. The result of the organizing process is the structure.
THE PURPOSE OF THE STRUCTURE
1. It defines the relationships between tasks and authority for individuals and
departments
2. It defines formal reporting relationships, the number of levels in the hierarchy of
the organization, and span of control.
3. It defines the groupings of individuals into departments and departments into
organization.
4. It defines the system to effect coordination of effort both vertical (authority) and
horizontal (tasks) directions.
IN STRUCTURING AN ORGANIZATION.
the engineer manager must consider the following.
1. Division of Labor determining the scope of work and how it is combined in a job.
2. delegation of authority the process of assigning various degrees of decision-
making authority to subordinates
3. Departmentation the grouping of related jobs, activities, or processes into major
organizational subunits.
4. span of control the number of people who report directly to a given manager
5. Coordination the linking of activities in the organization that serves to achieve a
common goal or objective
THE FORMAL ORGANIZATION
After the plan is adapted, the management will proceed to form an organization to
carry out the activities indicated in the plan.
The formal organization is the structure that details lines of responsibilities, authority,
and position. What is depicted in the organization chart is the formal organization. It
is the planned structure and it represents the deliberate attempt to establish pattered
relationships among components that will meet the objectives effectively.
The formal structure is described by management through:
1. Organization Chart
2. Organization Manual
3. Policy Manual
THE FORMAL ORGANIZATION
The organization chart is a diagram of the organizations official positions and
formal lines of authority.
The organization manual provides written description of authority relationships,
details the functions of major organizational units, and describes job procedures.
The policy manual describes personnel activities and company policies.
INFORMAL GROUPS
There are instances when members of an organization spontaneously form a group
with friendship as a principal reason for belonging. This group is called an informal
group. It is not a part of the formal organization and it does not have a formal
performance purpose.
Informal groups are oftentimes very useful in the accomplishment of major tasks,
especially if these tasks conform with the expectations of the members of the informal
group.
The informal organization, useful as it is, is vulnerable to expediency, manipulation,
and opportunism. Its low visibility makes it difficult for management to detect these
perversions and considerable harm can be done to the company.
TYPES OF ORGANIZATIONAL STRUCTURES
1. Functional Organization this is a form of departmentalization in which everyone
engaged in one functional activity, such as engineering or marketing, is grouped in
one unit.
2. Product or market organization this refers to the organization of the company by
divisions that brings together all those involved with a certain type of product or
costumer.
3. Matrix Organization an organization structure in which each employee reports
to both functional or division manager and to a project or group manager.
TYPICAL FUNCTIONAL ORGANIZATION CHART OF
A CONSTRUCTION COMPANY
President

Vice President Vice President Vice President Vice President


Marketing Construction Finance Human Resource
FUNCTIONAL ORGANIZATION
Functional organization structures are very effective in smaller firms, especially
single business firms where key activities revolve around well defined skills and
areas of specialization.
Functional organization have certain advantages. They are the following:
1. The grouping of employees who perform a common task permit economies of scale
and efficient resource use.
2. Since the chain of command converges at the top of the organization, decision-
making is centralized, providing a unified direction from the top.
3. Communication and coordination among employees within each department are
excellent.
4. The structure promotes high-quality technical problem solving.
FUNCTIONAL ORGANIZATION
5. The organization is provided with in depth skill specialization and development.
6. Employees are provided with career progress within functional departments.

The disadvantages of the functional organization are the following:


1. Communication and coordination between departments are often poor.
2. Decisions involving more than one department pile up at the top management level and are often
delayed.
3. Work specialization and division of labor, which are stressed in a functional organization, produce
routine, non motivating employee tasks.
4. It is difficult to identify which section or group is responsible for certain problems
5. There is a limited view of organizational parts by employees.
6. There is a limited general management training for employees.
PRODUCT OR MARKET ORGANIZATION
The product or market organization with its feature of operating by divisions, its
appropriate for a large corporation with many product lines in several related
industries.
Advantages:
1. The organization is flexibles and responsive to change.
2. The organization provides a high concern for costumers needs.
3. The organization provides excellent coordination across functional departments.
4. There is easy pinpointing of responsibility for product problems
5. There is emphasis on overall product and division goals.
6. The opportunity for the development of general management skills is provided.
PRODUCT OR MARKET ORGANIZATION
Disadvantages:
1. There is high possibility of duplication of resources across divisions.
2. There is less technical depth and specialization in divisions.
3. There is poor coordination across divisions.
4. There is less top management control.
5. There is competition for corporate resources.
TYPICAL PRODUCT/MARKET ORGANIZATION FOR
A CONSTRUCTION COMPANY
President

Vice President
Vice President Vice President
Government
Industrial Accounts Residential Accounts
Accounts

Marketing Marketing Marketing

Construction Construction Construction

Finance Finance Finance

HR HR HR
MATRIX ORGANIZATION
A matrix organization is structure with two (or more) channels of command, two lines
of budget authority, and two sources of performance and reward.
The matrix organization is afforded with the following advantages:
1. There is more efficient use of resources than divisional structure.
2. There is flexibility and adaptability to changing environment.
3. The development of both general and functional management skills are present.
4. These is interdisciplinary cooperation and any expertise is available in all divisions.
5. There are enlarged tasks for employees which motivate them better.
MATRIX ORGANIZATION
Disadvantages:
1. There is frustration and confusion from dual chain of command
2. There is high conflict between divisional and functional interests.
3. There are many meetings and more discussion than action.
4. There is a need for human relations training for key employees and managers.
5. There is a tendency for power dominance by one side of the matrix.
TYPICAL MATRIX ORGANIZATION OF A
CONSTRUCTION FIRM
President

Vice President Vice President Vice President


For Finance For construction For HR

Project Manager Construction Manager Purchasing Manager Contract Administration


Manager

Project X Manager Engineer Purchasing Specialist Contract Negotiator

Project Y Manager Engineer Purchasing Specialist Contract Negotiator

Project Z Manager Engineer Purchasing Specialist Contract Negotiator


TYPES OF AUTHORITY
The delegation of authority is requisite for effective organizing. It consist of three types. They
are as follows:
1. Line Authority a managers right to tell subordinates what to do and then see that they do
it. Line departments perform tasks that reflect the organizations primary goal and mission.
2. Staff Authority a staff specialists right to give advise to a superior. Staff departments
include all those that provide specialized skills in support of line departments. The staff
officers may be classified into the following:
Personal Staff Those individuals assigned to a specific manager to provide needed staff services.
Specialized staff those individuals providing needed staff services for the whole organization

3. Functional Authority a specialists right to oversee lower level personnel involved in that
specialty, regardless of where the personnel are in the organizations. Functional authority is
given to a person or a work group to make decisions related to their expertise even of these
decisions concern other departments.
PURPOSE OF COMMITTEES
When certain formal groups are deemed inappropriate to meet expectations, committees are
often times harnessed to achieve organizational goals.
A committee is a formal group of persons formed for a specific purpose. For instance, the
product planning committee, is often staffed by top executives from marketing, production,
research, engineering, and finance, who work part time to evaluate and approve product
ideas.
A committee is classified by the following:
1. Ad hoc Committee one created for the short term purpose and have a limited life.
2. Standing committee it is relatively permanent committee that deals with issues on an on
going basis.