Professional Documents
Culture Documents
Text Book
3-Mar-15
Chapter 3
Organizing
3.1 INTRODUCTION
3-Mar-15
Organizing
Planning
Leading
Controlling
5
Activities of organizing:
(1) workplace,
(2) structure,
(3) delegate work, and
(4) establish working relationship
Cross-functional teams
Conclusions
7
Organizing
Definitions
Business/Product
Management
Engineering
R&D
Production
Safety &
Environment
Procurement
10
Marketing
Legal
Public Relations
Service
Distribution
Customers
Accounting
Human Resources
Definitions (contd)
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12
13
(1) functional,
(2) discipline,
(3) product/regional,
(4) matrix,
(5) team,
(6) network
14
Functional Organization
Technical Director
Mechanical Design
Electrical Design
System Engineering
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Quality Control
Production Engineering
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Encourages excessive
centralization
Delays decision making
Simplifies
coordination
Compounds
communication line
loss
Permits use of
current technologies
and equipment
Restricts development
of managerial skills
Startup companies
Organizations with narrow product ranges, simple marketing
pattern and few production sites
17
Discipline-Based Organization
Engineering Dean
Mechanical Engineering
Electrical Engineering
Chemical Engineering
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Industrial Engineering
Civil Engineering
Discipline Organizations
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Product Organization
Technical Director
Governmental Products
University Products
Consumer Products
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Custom Products
Industrial Products
Regional Organization
President
North America
Latin America
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Europe
Asia
Africa
Facilitates coordination
Requires management
talents
Encourages
management
development
Provides for
decentralization
Promotes growth
22
Technical obsolescence
of specialists
Changes take time to
effect
Matrix Organization
Functional Control
Project A
Project-based
Control
Project B
Project C
Engineering
Production
Logistics
Design
Excellent for
individuals (to achieve
exposure and
interactions)
24
Dual reporting
Severe conflicts among
managers
Delicate balance of
power (people versus
money/time)
Communications
problems
25
Functional Manager:
Manpower, skills knowledge,
facilities
Own funds to support people
Team Organization
26
Functional Control
Team Leader
Member A
Member B
Member C
Member D
Engineering
Production
Logistics
Design
Team Organization
Team members on loan from functional organizations to eliminate
organizational conflicts
27
Network Organization
Global business alliances/partnerships to manufacture, market,
deliver and service products (supply chains)
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Question # 3.1
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Question # 3.2
Question # 3.2 A materials manager suspects that the quality of work being done within his
department was steadily deteriorating. He wanted to introduce a program of change to improve
quality. What steps should he take?
Answer # 3.2 He should take the following steps:
(1) Benchmark externally to define the current level of in-house quality performance and
pertinent metrics to assess quality performance,
(2) Set up a quality improvement team (quality cycle), comprising of representatives of the
workers, who have hands-on
experience and skills in handling different materials, with no
participation of management people,
(3) Define team objectives,
(4) Specify time and resources constraints,
(5) Hire an external consultants to offer ideas of best practices in materials handling, only if the
team makes little progress over a reasonable period of time,
(6) Support the team recommendations and make resources available for its implementation,
(7) Recognize and reward the team achievements,
(8) Monitor quality performance regularly thereafter.
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31
3M - 15% of time for creative work of own choice, supported by extra grant money,
Group is to derive 30% of income from inventions made in the last 4 years.
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CAGR (%)
Trilogy
75
49
First USA
60
21
Dell Computer
51
39
Starbucks
46
23
Home Depot
25
17
33
33
3-Mar-15
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Design is thrown over the wall and check on producibility may require
undoing design
Methods to eliminate silo effect:
(1) manufacturing sign-off,
(2) integrator,
35
36
Millions
2500
2000
1500
1000
500
0
1990
1991
1992
1993
1994
Year
37
1995
1996
1997
1998
38
39
40
41
42
43
44
45
Team Discipline
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Team Learning
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Team Effectiveness
Team Goals are clear, of high impact, measurable and with top
management support
Members are results-oriented, efficient, having complementary
skills and experience, high energy level, positive attitude to
collaborate, each supported by staff with specific expertise
Work Environment is excellent (easy to use communications
tools, opportunity for self-expression, pleasant work
atmosphere, etc.)
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49
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Do you compliment your co-workers when you observe them doing a good
job?
Are you enthusiastic about helping your teammates in any way you can?
Do you always to do your job thoroughly and completely?
Do you take advantage of every opportunity to support the team effort?
Do you have a professional respect for everyone on your team?
Can you follow through and support policies and rules with which you
personally disagree?
Do you attempt to avoid undermining those around you for personal gains?
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Are you enthusiastic about your company and the direction in which it is
headed?
Do you show appreciation for the efforts of others and acknowledge their
contributions to the big picture?
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Team Stages
53
Question # 3.5
Question # 3.5 The company has been making most of its sales to a few large customers.
The company president wishes to broaden its customer base. To do so may require a change
of company culture, its product line strategy, its marketing/sales program, and its service
organization. How should he go about making the required changes?
Answer # 3.5 The company president should take the following steps:
(1) Authorize market research to verify the existence of an enlarged customer base for the
company's products.
(2) Conduct an external benchmarking program to validate the company's marketing
practice being compatible to the best in industry.
(3) Communicate the results to all employees via a town meeting, electronic bulletin board,
company newsletter or other such means.
(4) Form a high-level team, which contains representative of all major functional groups
(e.g., marketing, design engineering, product development, production, finance, and
service) to develop a strategy for broadening the customer base (e.g., segment size,
growth rate, new product features, competition, marketing/sales program, service
organization to ensure customer satisfaction, etc.)
54
Question # 3.5
(5) Form a New Products division, whose primary objectives are to produce, Market, sell
and service the enlarged target customer base.
(6) Authorize resources and delegate the responsibility and authority of program
implementation to the New Products division.
(7) Review results regularly to monitor progress.
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Question # 3.7
Question # 3.7 As the companys sales are coming down unexpectedly, the president asks you to
chair a task force with the objectives of developing solutions to correct the situation. Who do you
want to be on this task force? How should this problem be resolved?
Answer # 3.7
(1) The preferred members on this presidential task force should be marketing/sales, design
engineering, product development, production, finance, logistics, and service. The specific
representatives from these functional groups must be experienced, recognized leaders in their
domains of expertise, known for their innovative and creative insights, and are relatively easy to
work with.
(2) The task force should first get organized. Available data are then to e reviewed. The groups
should brainstorm possible causes for the declining sales:
a. Was the product price too high in comparison to competition due to high product cost?
b. Were our sales people ineffective due to poor training, low morale, meager compensation,
and/or inadequate equipment/facilities?
c. Was our advertisement budget too low, leading to low product exposures and brand name
recognition?
d. Was there a decrease of product demand due to new substitution products recently coming
into the market from overseas?
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Question # 3.7
e. Were our customers dissatisfied with the services (e.g., problem-solving, pare parts,
order processing, etc.)?
f. Others.
(3) Assign task force members to collect/acquire applicable data for verifying any identified
causes responsible for the sales decline.
(4) Once the real causes for sales decline are identified, add additional experts to the task
force to help defining solutions. Develop a list of options available to eliminate all causes of
the problem.
(5) Rank order the options, document the decision criteria and report back to the company
president.
(6) Reorganize the task force to include experts on project implementation. Implement the
project plan as approved.
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Delegating
58
Why Delegating
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Why Delegating
Facilitate teamwork, making job more satisfying to employees
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Delegation Matrix
1: Employee
Can
2: Neither; if must,
then to be done
by engineering
manager
3: Employee
Employee
Cannot
4: Engineering
manager
Cannot
Can
Engineering Manager
61
What to Delegate
Problems/Issue requiring exploration, study and recommendation for
decision making
Activities coming within the job scope and capabilities of employee
Tasks fitting companys needs and promoting employee development
and growth
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How to Delegate
64
Barriers to Delegation
Own technological obsolescence - Employee may learn and grow technically
65
Notes on Delegation
Delegation is limited by control in effect - no control, no
delegation
Authority must be commensurate with responsibility (related
to work delegated)
Accountability - Achieving the expected results by
discharging responsibility and using authority delegated
Willingness and ability of employee are keys
66
Question # 3.9
Question # 3.9 Steve Lee, the Engineering Manager, delegates tasks as a good manager
should. However, Mark Hayes, the Engineering Director, has the bad habit of calling up
Steve unexpectedly to get detailed reports on various on-going activities in Steves
department. Steve does not want to hold daily staff meetings in order to satisfy Marks
information needs, because Steve is quite certain that requiring his professional staff to make
daily reports will definitely upset them, as all of them are known to prefer independence.
What should Steve do?
Answer # 3.9
(1) Since the Director's need of knowing details may be created by the need of his boss, the
VP. It is not a good idea for Steve to question Mark's wisdom of asking so many detailed
questions. Read all progress reports, make notes at staff meeting, and tabulate the major
milestones and results of all projects. Have this table on the desk, so that some details can
be extracted from it, when the Director calls.
(2) If Steve cannot answer specific questions, offer to call in the professional staff involved
and have a verbal report made in Steve's presence. Make notes on additional details so
reported.
67
Question # 3.9
(3) Resist an increase in review frequency, as Steve should protect his staff from diverting
too much time to communications.
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Types of Roles
Line Roles (Profit Centers) - (1) Exclusive rights to offer product/service
to customers (e.g., production, product design, business management,
marketing), (2) Accountable for generating profits (pricing, cost)
Support Roles (Cost Centers) - (1) Rights to recommend/advise (e.g.,
legal, R&D, accounting, etc), (2) Accountable for offering active support
(cost efficiency, work method, evaluation)
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3
2
2
2
2
4
6
5
6
5
3
3
4
6
4
2
Authorize Expenditures
Inspect Raw Materials
Quality Control Testing
Update Inventory Files
Withdraw Materials
Project Manager
4
5
2
2
2
Project Office
Department Manager
Type of Conflicts
72
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Informal Organizations
Useful in add additional bonding between employees (smooth
operation, employee satisfaction)
Social (Shared values and beliefs -golf club, bowling clubs, credit
union)
74
Conclusions
75
Question # 3.3
Do not make the same mistake as the training manager, who is severely
suffering from a chronic lack of perspective. The company should do the
following:
(1)Reject the suggestion of the training manager and continue to honor the
sales contact.
(2) Conduct a comprehensive survey of trainees to find out their comments
about the training program (e.g., language, technical terms, speed of
delivery, lack of hands-on practices, trainers not proficient in training,
arrogant attitude toward third-world engineers, etc.) and solicit their
recommendations to improve)
(3) Work with trainees to improve the training programs (e.g., adding
remedial topics for trainees to catch up on selected background materials,
use of electronic equipment not widely available back home, plant tours to
observe real-life operation and maintenance procedures, etc.)
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78
Question # 3.4
Question # 3.4 Six months ago, the company hired an engineer for his
expertise in hydraulic drives, based on a product development plan with a
forecast for needing this expertise. Market conditions have suddenly changed
in favor of sophisticated electric drives. The engineer involved turns out to
be very good in his area of specialization. But it is difficult to retrain him for
other assignments in the company. Should the company discharge this
engineer?
Answer # 3.4 Change in business conditions is a valid reason for force
reduction. Yes, the engineer should be discharged with severance pay. The
company may want to retain the service of an outplacement consulting firm
to assist the engineer in finding a new job. Furthermore, the company may
offer a very positive reference letter to support the engineer in his search for
new jobs.
79
Question # 3.6
Question # 3.6 The company is considering a plan to upgrade its current
product line. The cost of product upgrade is high. There is a small company
which has developed the technology required for this product upgrade. What
strategy should the company follow, if it wants to continue selling into its
current market with the new upgraded product?
Question # 3.6 Acquire the small company to shorten the time to market,
thus more readily to preserve its marketing position in the marketplace.
Integrate its technology into the company, modify production line to
accommodate the upgrade, and utilize the current marketing, sales and
service staff to manage customer relations. In this way, the company can
take advantage of its established brand name and expand the current
customer base.
80
Question # 3.8
Question # 3.8 A loyal and high volume customer has warned the companys Marketing
department that Project X is extremely critical to their need and that if this project is late,
they may be forced to buy elsewhere. The project manager knows that the best estimates
available to date from various in-house groups indicate that at the current rate of progress
the Project X will be late by about 6 months. What should the project manager do?
Answer # 3.8 Meeting customer's requirements must always be the primary goal of every
company, even it may mean a loss of profitability sometimes. Re-organize the project to
utilize external resources (e.g., drafting, model making, testing, design of specific parts,
quality control, etc.) for supplementing in-house capabilities in order to shorten the time to
market. Estimate the additional costs involved and get an authorization. Assure Marketing
that Project X will be delivered on time.
Understand the real causes of project delays (e.g., poor initial estimates, poor execution,
special unanticipated events, delivery problems of vendor-supplied parts, short of skilled
staff due to resignation, etc.), develop the pertinent contingency measures, and document
these findings for future use.
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Chapter 2 Planning
3-Mar-15
84
3-Mar-15
3.10 In an organization offering a dual-ladder career progression system, technically trained people
may opt to progress along a technical ladder instead of the traditional managerial ladder. How does
this work? Hint: Get help from figures on next slide.
Continued
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3-Mar-15
Director
Fellow
Manager
Manager
Associate
Supervisor
Project Manager
Consultant
Section Engineer
Project Engineer
Senior Engineer
Staff Engineer
Engineer
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3-Mar-15
Number of Employees
Continued
87
3-Mar-15
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3-Mar-15