15/03/2019

o Organizing Defined

organizing the
o Reasoning for Organizing
o Activities of Organizing
o The Purpose of the Structure
engineering function o
o
The Formal Organization
The Informal Organization/Groups
o Types of Authority
o Types of Organizational Structures
o Staffing

Organizing is another important function
of engineering management.
Organizing means arranging and relating work
so that it can be done efficiently by the
appropriate people (Galbraith 2002).
The deployment of organizational resources to
achieve strategic goals.
1.
Purpose of Organizing
• Facilitate implementation of plans
• Breakdown total job into more manageable man-size jobs
• Help facilitate the assignment of authority, responsibility,
and accountability for certain functions and tasks.

2.
“
Organization Structure
o Defines how tasks are divided, resources are deployed,
Activities of Organizing and departments are coordinated
1. Organizing one’s own workplace for productivity. o The design of systems to ensure effective coordination
2. Developing organizational structure of employees across department
3. Establishing working relationship o Managers are empowered to design the organizational
4. Delegating - the entrustment of responsibility and structure the team, group, department ,etc. and to
authority to others and the creation of accountability define the working relationships conductive for
for results. attaining the company’s objectives

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Elements of organizing
1. “
Purpose of the Structure
It defines the relationships between tasks and
authority for individuals and department.
2. It defines formal reporting relationships, the number of
levels in the hierarchy of organization, and the span of
control.
3. It defines the groupings of individuals into departments
and departments into organization. When structuring an organization, the engineering manager must be
4. It defines the system to effect of coordination of effort concerned with the following elements:
in both vertical (authority) and horizontal (tasks)
directions.

2. Division of Work. The 5. Centralization. It refers

3. Authority and to the concentration of
process of subdividing Responsibility. Each authority at the top
the work into doable individual and each level of an organization
1. Definition of Work. organizational unit or any of its
and manageable units. 4. Unity of Direction.
Management must be must have clearly subsystems. The
The application of delineated authority
Each set of activities
appropriate degree of
able to foresee the must be clearly
classical principles of defining the type and centralization varies
type, scope, and scope of work to be
directed toward
with the particular
management leads to specific objectives,
magnitude of work to performed and how to concern. In comparison
a functional division; work together, which
unified by one
with the contemporary
be performed in the agreed-on plan and
contemporary includes the right to settings, this
future. give orders and expend
one leader.
centralization is usually
concepts lead project
resources. considerably stronger in
oriented or task traditional
oriented divisions. organizations.

6. Chain of Command. A chain of

command is an unbroken line
of authority, which links all
persons to successively higher
✘ Greater change and uncertainty in the levels of authority. The process
of following the chain of
environment are usually associated with command for conveying orders
decentralization and other forms of
communication from higher to
✘ The amount of centralization or lower levels of authority is
decentralization should fit the firm’s strategy called the scalar principle. This
principle ensures that all
✘ In times of crisis or risk of company failure, persons know to whom they
authority may be centralized at the top report and from whom they
should expect directions.

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7. Span of control. The span of

control refers to the number of
people supervised by a
manager of supervisor. It may
be small (a few people) or large
(20 or 30 people). The choice of
a small or large span of control
depends on workforce diversity
task volume, and complexity of
work, as well as on the
geographic dispersion of
workers. The current trend is
moving toward larger span of
control, increasing from 7 to 20
or more.
8. Specialization refers to
the increased degree of skill
concentration in narrow
technical domains.
Specialization of work leads
to improved efficiency.
However overspecialization
may cause monotony,
fatigue, disinterest and
inefficiency on the part of
the worker.
9. Work Arrangement Work
needs to be arranged in a
rational and logical
manner. The logical
arrangement of work
promotes task
accomplishments and
enhances personal
satisfaction for more
workers over a long period
of time.

The Formal Organization

✘ Formal Organization means the intentional

structure of roles in formally organized
enterprise.
Formal Informal ✘ The structure that details lines of responsibilities,
Organization Organization authorities, and position.
✘ It is the planned structure and it represents the
deliberate attempt to established patterned
relationships among components that will meet
the objectives effectively.

The formal structure is described by Informal Organization

management through:

✘ It is a network of interpersonal relationships that arise when

✘ Organization chart – it is a diagram of the organization’s official
position and formal lines of authority.
✘ Organizational manual – it provides written descriptions of
authority relationships, details the function of major
organizational units, and describes job procedures.
✘ Policy manuals – it describes personnel activities and company
policies.
people associate with each other.
✘ It can also be described as any joint personal activity without
conscious joint purpose, although contributing to joint results.
✘ Thus, informal organizations—relationships that do not
appear on the organization chart—might include the machine
shop group, the sixth floor crowd, the Friday evening bowling
gang, and the morning coffee “regulars”.

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Informal Organizations Types of Authority

1. Line authority – a manager’s right to tell subordinates what to do

President
and then see that they do it.
2. Staff authority – a staff specialist’s right to give advice to a superior.
Vice president
• Staff officers may be classified into the following:
Division
etc. 1. Personal Staff – those individuals assigned to a
managers specific manager to provide needed staff services.
Department
etc.
2. Specialized Staff – those individuals providing
managers
needed staff services for the whole organization.
3. Functional authority – a specialist’s right to oversee lower level
Informal organization: Informal organization: Informal organization:
personnel involved in that specialty, regardless of where the
Morning coffee Bowling team Chess group personnel are in the organization.
“regulars”

✘ One aspect of organizing is the establishment of

departments.
✘ A department is a distinct area, division, or branch of an
organization over which a manager has authority for the
performance of the specified activities. Examples of
departmentation are:
■ enterprise function
■ territory or geography
■ customer group
■ product
■ Matrix organization

by Enterprise Function - It is the grouping of activities according to the by Territory or Geography - It is the grouping of activities by area
functions of the enterprise, such as production, selling, and financing. or territory that is common in enterprises operating over wide
A functional organization grouping (in a manufacturing company)

President
geographic areas.
Assistant to
Personnel
A territorial, or geographic, organization grouping (in a manufacturing company)
president

President
Marketing Engineering Production Finance

Marketing Personnel Purchasing Finance

Market Engineering Production Financial
Research Administration planning planning

Marketing Preliminary Industrial Budgets

Planning Design engineering
Western Southwest Central Southeast Eastern
Advertising region region region region region
Electrical Production General
and Promotion
Engineering engineering accounting

Sales Mechanical Purchasing Cost

administration Engineering accounting

Sales Hydraulic Tooling Statistics and Personnel

Engineering data
processing

Packaging General
production

Quality
Control
Engineering Production Accounting Sales

Advantages: Disadvantages:
· Logical reflection of functions · De-emphasizes overall company objectives Advantages: Disadvantages:
· Maintains power and prestige of major · Overspecializes and narrows viewpoints of · Places responsibility at a lower level · Requires more persons with general manager
functions key personnel · Places emphasis on local markets and problems abilities
· Follows principle of occupational · Reduces coordination between functions · Improves coordination in a region · Tends to make maintenance of economical central
specialization · Responsibility for profits is at the top only · Takes advantage of economies of local operation services difficult and may require services such as
· Simplifies training · Slow adaptation to changes in the · Better face-to-face communication with local personnel or purchasing at the regional level
· Furnishes means of tight control at the top environment interests · Makes control more difficult for top management
· Limits development of general managers · Furnishes measurable training ground for general
managers

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by Customer Group - It is the grouping of activities that reflects a by Product - It is the grouping of activities according to products or
primary interest in customers. product line, especially in multiline, large enterprises.
A product organization grouping (in a manufacturing company)
Customer departmentation (in a large bank) President

President
Marketing Personnel Purchasing Finance

Community-
Corporate Institutional
city banking
banking banking

Indicator Industrial
Instrument Name
Lights Tools Title
division
Division Division
Real estate and
Agricultural
mortgage loans
banking
Engineering Accounting Engineering Accounting

Production Sales Production Sales

Advantages: Disadvantages:
· Encourages focus on customer needs · May be difficult to coordinate operations
· Gives customers the feeling that they have an between competing customer demands
understanding supplier (banker) · Requires managers and staff expert in
· Develops expertness in customer area customers’ problems
· Customer groups may not always be clearly
defined (e.g., large corporate firms vs. other
corporate business)
Advantages: Disadvantages:
· Places attention and effort on product line · Requires more persons with general manager
· Facilitates use of specialized capital, facilities, skills, abilities
and knowledge · Tends to make maintenance of economical central
· Permits growth and diversity of products and services services difficult
· Improves coordination of functional activities · Presents increased problem on top of management
· Places responsibility for profits at the division level control
· Furnishes measurable training ground for general
managers
* Product departmentation is also used in in nonmanufacturing companies.

Matrix Organization - It is the combining of functional and project or

product patterns of departmentation in the same organization
structure. Matrix Organization (in engineering)

Director
Of
Engineering

Why is it important that the structural linking

mechanism we choose is right or appropriate
Chief of Chief Chief Chief Chief
Preliminary Mechanical Electrical Hydraulic Metallurgical
Design Engineering Engineer Engineer Engineer

for the organization?

Project A
manager

Project B
manager

Project C
manager

Project D
manager

Advantages: Disadvantages:
· Oriented toward end results · Conflict in organizational authority exists
· Professional identification is maintained · Possibility of disunity of command
· Pinpoints product-profit responsibility · Requires a manager effective in human
relations

More extensive than needed will result in unnecessary costs and over
Formal linking mechanisms that are insufficient to handle
complexity
linking requirements will result to poorly coordinated work

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Staffing is defined as filling, and keeping filled,

positions in the organizational structure.
○ Work specialization – degree to which the work
necessary to achieve organizational goals is broken
down into various jobs.
○ Job design – specification of task activities associated
with a particular job (e.g. a job as an administrative
assistant may include typing, filing and photocopying,
or it could involve such activities as coordinating
travels and meetings, investigating trouble spots, and
making decisions about a certain range of issues).
Some approaches to job design are as follows:

Movement of Personnel

1. Job simplification – the process of designing jobs so that 1. RECRUITMENT is the process of
encouraging, inducing, or
jobholders have only a small number of narrow activities to influencing applicants to apply
perform. for a certain vacant position.
2. Job rotation – practice of periodically shifting workers through a
set of jobs in a planned sequence.
3. Job enlargement – the allocation of a wider variety of similar tasks
to a job in order to make it more challenging. 2. SELECTION is the process of
4. Job enrichment – process of upgrading the job-task mix in order getting the most qualified
applicant from among different
to increase significantly the potential for growth, achievement, job seekers.
responsibility, and recognition.

3. TRAINING is the systematic

development of the 5. PROMOTION refers to the shifting of an employee to a new position to which
attitude/knowledge/behaviour both his status and responsibilities are increased.
patterns for the adequate
performance of a given job or
task.

4. TRANSFER refers to the shifting

of an employee from one
position to another without
increasing his duties,
responsibilities, or pay.

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6. PERFORMANCE APPRAISAL is the process of defining, measuring, evaluating, and

recording expectations from employee performance.
7. OUTPLACEMENT is the process of helping people who
have been dismissed from the company to regain
employment elsewhere.
8. LAY-OFF is a type of separation, temporary and
involuntary, usually traceable to a negative business
condition
9. DISCHARGE is a permanent separation of an employee, at
the will of an employer, if a person is not competent in his
job, guilty of breaking rules like delinquency and
insubordination, and other violations

10. RESIGNATION is voluntary and

permanent separation of an employee
due to due to low morale, low salary,

end
etc.

11. RETIREMENT can either be voluntary or

involuntary; if an employee retires upon
reaching the number of years of
services in a company as provided for
by its policies or upon reaching the age
of for retirement.