Organizing Technical Activities

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Chapter 4 ORGANIZING TECHNICAL ACTIVITIES The manager needs to acquire various skills in management, including those for organizing technical activities. In this highly competitive environment, the unskilled manager will not be able to bring his unit, or his company, as the case may be, to success. The value of a superior organizational set-up has been proven dramatically during the Second World War when a smaller American Naval force confronted the formidable Japanese navy at Midway. Military historians indicated that the Americans emerged victorious because of the superior organizational skills of their leaders. Even today, skills in organizing contribute largely to the accomplishment of the objectives of many organizations, whether they are private businesses or otherwise. The positive effects of business success become more pronounced when they come as a result of international operations. International businesses, however, cannot hope to make huge profit unless they are properly organized to implement their plans. 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 the particular tasks 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 “the structuring of resources and activities to accomplish objectives in an efficient and effective manner.” The arrangement or relationship of positions within an 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 the 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 in both vertical (authority) and horizontal (tasks) directions. When structuring an organization, the manager must be concerned with 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.

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5. Coordination – the linking of activities in the organization that serves to achieve a common goal or objective. THE FORMAL ORGANIZATION  After a plan is adapted, 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 patterned relationships among the components that will meet the objectives effectively”. The formal structure is described by management through: 1. organization chart 2. organizational manual and 3. policy manuals. The organizational chart is a diagram of the organization’s official positions and formal lines of authority. The organizational manual provides written descriptions 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 Formal organizations require the formation of formal groups which will be assigned to perform specific tasks aimed at achieving organizational objectives. The formal group is a part of the organization structure. 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 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,” according to Valentine. Its low visibility, Valentine added, makes it “difficult for management to detect these perversions and considerable harm can be done to the company.” The manager is, therefore warned that he must be on the lookout for the possible difficulties that the informal groups may do the organization. It will be to his best interest if he could make the informal groups work for the organization. TYPES OF ORGANIZATIONAL STRUCTURES Before the commencement of activities, the decision-makers in an organization will have to decide on what structure to adapt. Depending on the size and type of operations, a certain structural type may best fit the requirements.

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Organizations may be classified into three types. They are the following: 1. Functional Organization – this is a form of departmentalization in which everyone engaged in one functional activity, such as engineering or marketing, is grouped into one unit. 2. Product or Market Organization – this refers to the organization of a company by divisions that bring together all those involved with a certain type of product or customer. 3. Matrix organization – an organizational structure in which each employee reports both a functional or division manager and to a project or group manager.

Fig 4.1 Reasons for Joining or Forming a Group

FRIENDSHIP

COMMON INTEREST like: concern for the environment or love for classical music

WHICH PROPEL PEOPLE TO

PROXIMITY which gives people the chance to share ideas, opinions, and feelings

FORM OR JOIN

NEED SATISFACTION which are derived from unions, cultural societies, fraternities, etc. COLLECTIVE POWER which is derived from unions, fraternities, etc. GROUP GOALS which attract individuals like: consumer society, sports club, etc.

 AN INFORMAL GROUP

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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.”  Advantages: 1. The groupings 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. 5. The organization is provided with in depth skill specialization and development. 6. Employees are provided with career progress within fu nctional departments. Disadvantages: 1. Communication and coordination between the 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, no motivating employee tasks. 4. It is difficult to identify which section or group is responsible for certain problems. 5. There is limited view of organizational goals by employees. 6. There is limited general management training for employees.

Fig. 4.2 A typical Functional Organization Chart of a Construction Company PRESIDENT/ GENERAL MANAGER

 Vice President Marketing

 Vice President Construction

 Vice President Finance

 Vice President Human Resources

Product or Market Organization The product or market organization, with its feature of operating by divisions, is “appropriate for a large corporation with many product li nes in several related companies.”  Advantages: 1. The organization is flexible and is responsive to change. 2. The organization provides a high concern for customer’s 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.

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6. The development of the general management skills is provided. Disadvantages: 1. There is a 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.

Fig. 4.3 A Typical Product/Market Organization for a Construction Company PRESIDENT

 Vice President Government  Accounts

 Vice President Industrial  Accounts

 Vice President Residential  Accounts

Marketing

Marketing

Marketing

Construction

Construction

Construction

Finance

Finance

Finance

Human Resources

Human Resources

Human Resources

Matrix Organization  A matrix, organization, according to Thompson and Strickland, “is a structure with two (or more) channels of command, two lines of budget authority, and two sources of performance and reward.” Higgins declared that “the matrix structure was designed to keep employees in a central pool and to allocate them to various projects in the firm according to length of time they were needed.”  Advantages: 1. There is more efficient use of resources than the divisional structure. 2. There is flexibility and adaptability to changing environment. 3. The development of both general and functional management skills are present. 4. There is interdisciplinary cooperation and any expertise is available to all divisions. 5. There are enlarged tasks for employees which motivate them better.

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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. Fig. 4.4 A Typical Matrix Organization of a Construction Firm

PRESIDENT/ GENERAL MANAGER

 Vice President Finance

 Vice President Construction

 Vice President Human Resources

Projects Manager

Construction Manager

Purchasing Manager

Contract  Administration Manager

Project X Manager

Engineer

Purchasing Specialist

Contract Negotiator

Project Y Manager

Engineer

Purchasing Specialist

Contract Negotiator

Purchasing Specialist

Contract Negotiator

Project Z Manager

Engineer

TYPES OF AUTHORITY The delegation of authority is a requisite for effective organizing. It consists of three types. 1. Line authority – a manager’s right to tell subordinates what to do and then see they do it. 2. Staff authority – a staff specialist’s right to give advice to superior.

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3. Functional authority – a specialist’s right to oversee lower level personnel involved in that specialty, regardless of where the personnel are in the organization. Line departments perform tasks that reflect the organization’s primary goal and mission. In a construction firm, the department that negotiates and secures contracts for the firm is a line department. The construction division is also a line of function. Staff departments include all those that provided specialized skills in support of line departments. Examples of staff departments include those which perform strategic planning, labor relations, research, accounting, and personnel. Staff officers may be classified into the following: 1. Personal Staff – those individuals assigned to a specific manager to provide needed staff services. 2. Specialized staff – those individuals providing needed staff services for the whole organization. Functional authority is one given to a person or a work group to make decisions related to their expertise even if these decisions concern other departments. This authority is given to most budget officers of organizations, as well as other officers.

Fig. 4.5 A Line and Staff Organization PRESIDENT/ GENERAL MANAGER Corporate Planning

Director of Research and Development

Director of Marketing

Legal Counsel

Director of Manufacturing

Director of Finance

Industrial Engineering Manager

Factory Manager

Quality Control Manager

First Shift Supervisor

Second Shift Supervisor

Third Shift Supervisor

Director of Personnel

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THE PURPOSE OF COMMITTEES When certain formal groups are deemed inappropriate to meet expectation, committees are oftentimes harnessed to achieve organizational goals. Many organizations, large or small, make use of committees.  A committee is a formal group of persons formed for a specific purpose. For instance, the product planning committee, as described by Millevo, is ‘’often staffed by top executives from marketing, production, research, engineering, and finance, who work part-time to evaluate and approve product ideas.’’ Committees are very useful most especially to engineering and manufacturing firms. When a certain concern, like product development, is under consideration, a committee is usually formed to provide the necessary line-up of expertise needed to achieve certain objectives. Committees may be classified as follows: 1.  Ad hoc committee – one created for a short-term purpose and have a limited life. An example is the committee created to manage the anniversary festivities of a certain firm. 2. Standing committee – it is a relatively permanent committee that deals with issues on an ongoing basis. An example is the grievance committee set up to handle initially complaints from employees of the organization. Committees may not work properly, however, if they are not correctly managed. Delaney suggests that ‘’it might be useful to set up some procedure to make the committee a more effective tool to accomplish our goals.’’

QUESTIONS FOR REVIEW AND DISCUSSION 1. Why is it important for the engineer manage to acquire skills in organizing? 2. How may organizing be defined? 3. What purpose do organizational structures serve? 4. What must be the concern of the manager when structuring the organization? 5. What is the purpose of the formal organization? 6. What are informal groups? Why are they formed? 7. What are the types of organizational structures? How may they be distinguished? 8. What is meant by ‘’line authority’’ by ‘’staff authority’’? 9. Distinguish ‘’personal staff’’ from ‘’specialized staff’’. 10. What are committees? How may they be classified? SUGGESTED ITEM FOR RESEARDH 1. Prepare an organization chart of a large engineering firm showing line and staff relationship

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