Unit 1

MANAGEMENT BASICS AND OVERVIEW OF PROJECT MANAGEMENT

Prepared by: Prof. Seemaah Keddar

Introduction• Engineer: The word engineer stem from Latin ingenium,

which meant a talent, natural capacity, or clever invention.

• Engineering as a Profession: Defined in the first issue of the English journal Engineering as: “the art of directing the great sources of power in nature, for the use and convenience of man.”

• The more and complete definition was created in 1979 by American Engineering societies, acting together through the Engineers’ Council for Profession Development(ECPD). ECPD defined Engineering as:– “The profession in which a knowledge of the mathematics and

natural sciences gained by study, experience, and practice is applied with judgment to develop ways to utilize, economically the materials and forces of nature for the benefit of mankind”.

Management• Manage: This word came into English from the

Italian managgiare, meaning ‘to handle’. It traces back to the Latin word ‘manus’ – ‘hand’.

• Management Definitions: – The work of creating and maintaining environments

in which people can accomplish goals efficiently and effectively.

– The process of achieving desired results through efficient utilization of human and material resources.

– The process of reaching organizational goals by working with and through people and other organizational resources.

Engineering Jobs in Company

Management Levels• Three levels of Management:

1. First-line Managers: • Directly supervise nonmanagers. • They hold titles such as foreman, supervisor, or

section chief. • They are responsible for carrying out the plans and

objectives of higher management, using the personnel and other resources assigned to them.

• They make short range operating plans governing what will be done tomorrow or next week, assign tasks to their workers, supervise the work that will be done, and evaluate performance of individual workers.

• Many engineers who go into production or construction environment quickly find themselves assigned as a foreman or supervisor.

Management Levels2. Middle Managers: – Carry titles such as plant manager,

division head, chief engineer, or operations manager.

– They make plans to achieve the long-range goals set by top management, establish departmental policies, and evaluate the performance of subordinate work unit and their managers.

Management Levels3. Top Managers: – Carry titles such as chairman of board,

president, Managing Director(MD), executive vice president, Chief Executive Officer(CEO).

– They are responsible for defining the vision, mission, and objectives of the enterprise.

– They set goals and prepare long-range plans.

– They evaluate the performance of the major departments.

Engineering ManagementDefinition: – Engineering management is the art and science

of planning, organizing, allocating resources, and directing and controlling activities that have a technological component (by American Society for Engineering Management).

– Engineering management is the application of quantitative methods and techniques to the practice of management.

– The engineering manager is distinguished from other managers because he possesses both an ability to apply engineering principles and a skill in organizing and directing people and projects.

Functions of Management

• The acronym stands for steps in the administrative process: Planning, Organizing, Staffing, Directing, Coordinating, Reporting and Budgeting:– Planning, that is working out in broad outline the

things that need to be done and the methods for doing them to accomplish the purpose set for the enterprise;

– Organizing, that is the establishment of the formal structure of authority through which work subdivisions are arranged, defined, and coordinated for the defined objective;

– Staffing, that is the whole personnel function of bringing in and training the staff and maintaining favorable conditions of work;

Functions of Management

– Directing, that is the continuous task of making decisions and embodying them in specific and general orders and instructions and serving as the leader of the enterprise;

– Coordinating, that is the all important duty of interrelating the various parts of the work;

– Reporting, that is keeping those to whom the executive is responsible informed as to what is going on, which thus includes keeping himself and his subordinates informed through records, research, and inspection;

– Budgeting, with all that goes with budgeting in the form of planning, accounting and control.

Scientific Management• Scientific management (also called Taylorism or

the Taylor system) is a theory of management that analyzes and synthesizes workflows, improving labour productivity.

• The core ideas of the theory were developed by Frederick Winslow Taylor in the 1880s and 1890s, and were first published in his monographs, Shop Management (1905) and The Principles of Scientific Management (1911).

• Frederick Taylor believed that decisions based upon tradition and rules of thumb should be replaced by precise procedures developed after careful study of an individual at work.

Scientific Management• Taylor believed that scientific management cannot

work unless the worker benefits. In his view, management should arrange the work in such a way that one is able to produce more and get paid more.

• The main aim of scientific management is to develop all men to their greatest efficiency and prosperity.

• The specific objectives are to enhance production and productivity, decrease cost of production and maximise prosperity both for employer and employees having common interests.

Scientific ManagementObjectives of Scientific ManagementThe four objectives of management under scientific management

were as follows:1. The development of a science for each element of a man's

work to replace the old rule-of-thumb methods. 

2. The scientific selection, training and development of workers instead of allowing them to choose their own tasks and train themselves as best they could.

3. The development of a spirit of hearty cooperation between workers and management to ensure that work would be carried out in accordance with scientifically devised procedures.

4. The division of work between workers and the management in almost equal shares, each group taking over the work for which it is best fitted.

Scientific ManagementCharacteristics of Scientific Management1. It is a systematic approach to handle management problems.

2. It implies scientific techniques in method of work, recruitment, selection and training of workers.

3. It rejects the age old method of rule of thumb’ or ‘hit or miss’ approach.

4. It attempts to discover the best method of doing the work at the lowest cost.

5. It attempts to develop each worker to his greatest efficiency.

6. It involves a complete change in the mental attitude of the workers as well as of the management.

Scientific ManagementCriticism on Scientific Management:Applications of scientific management Sometimes fail to account for two inherent difficulties:1. It ignores individual differences: the most

efficient way of working for one person may be inefficient for another; 

2. It ignores the fact that the economic interests of workers and management are rarely identical.

Scientific ManagementContributors of Scientific Management:• Charles Babbage(1792-1871): He is grandfather of

scientific management. He demonstrated world’s first mechanical calculator, his ‘difference engine’ in 1822.

• Henry Towne(1844-1924): Published paper “Engineer as an economist”, wherein he urged the association of engineers and economist as industrial managers. The combination of knowledge along with at least some skill as an accountant is essential for successful manager of industry.

• Frederick Taylor(1856-1915): Defined principles of scientific management. Taylor pioneered method time and motion study.

• Frank Gilbreth(1868-1924): He made studies in applying principles of motion economy and is considered to be the originator of motion study.

• Gilberth: Suggested 22 principles of motion economy.

Administrative Management• Administrative management basically focuses on how a

business should be organized and the practices an effective manager should follow.

• The main focus of administrative school or general management theory is on finding "the best way " to run organizations.

• Henry Fayol, a French industrialist, is the chief architect and the father of the administrative management theory.

• Fayol developed fourteen principles of management, which enabled a manager to construct a formal structure of the organization and to supervise it in a rational way. He focused his research and work on a more managerial level.

• According to Fayol the five functions of managers were:

Administrative Management

Fig. Functions of Managers (According to Henry Fayol)

• Planning is the act of predicting the future and acting on it. "Planning reduces uncertainty by forcing managers to look ahead, predict change, consider the impact of change and develop appropriate responses."

• Organization is the development of the institution's resources, including material and human.

• Commanding is keeping the institution's actions and processes running.

• Co-ordination is the alignment and harmonization of the groups' efforts.

• Finally, control means that the above activities are performed according to the appropriate rules and procedures.

Administrative Management

• Fayol emphasized the role of administrative management and concluded that all activities that occur in business organizations could be divided into six main groups. 

1. Technical (production, manufacturing); 2. Commercial (buying, selling, exchange); 3. Financial (obtaining and using capital); 4. Security (protection of property and persons); 5. Accounting (balance sheet, stocktaking, statistics, costing); 6. Managerial (planning, organizing, commanding, coordinating,

controlling).

• Fayol concluded that the six groups of activities are interdependent and that it is the role of management to ensure all six activities work smoothly to achieve the goals of an enterprise.

Administrative Management

Main contributors of Administrative Management School are:• Henry Fayol (1841-1925): Father of Administrative

Management.• Max Weber (1864-1920): He developed a model for

rational and efficient large organization.• Russell Robb (1864-19727): He expressed his views on

organization in three lectures presented to the Harvard University Graduate School of Business Administration in 1909 and later published.

• Lyndall Urwick : He was the first who tried to develop a unified body of knowledge. Using Fayol’s management functions as a framework, he analyzed the writings of Fayol, Taylor, Mary Parker Follett, James Mooney, and others, and attempted to correlate them with some of his own views into a consistent system of management thought.

Administrative Management

Having a clear and focused strategy is critically important to the success of a business, and without a well-defined strategy, businesses will tend to stall or even fail. A successful strategic plan does the following:

• Provides Direction and Action Plans - It establishes in a clear, concise and strategically sound way a) the direction for the organization and b) how this will be achieved, including detailed action plans.

• Prioritizes and Aligns Activities - Strategic planning is about making choices, establishing priorities, allocating resources to strategic initiatives and coordinating to achieve desired results.

• Defines Responsibilities - It defines clear lines of responsibilities and timelines for achieving expected results on the agreed strategic initiatives.

Importance of Strategy

• Enhances Communication and Commitment - In clarifying the vision and responsibilities, the strategic plan increases the alignment of all organizational activities and fosters commitment at all levels.

• Provides a Framework for Ongoing Decision Making - Since all decisions should support the strategy, the strategy and the strategic initiatives are the reference point for decision-making.

Importance of Strategy