Chapter 4

ORGANIZING TECHNICAL ACTIVITIES

The engineer 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 becomes more pronounced when they come as a result
of international operations. International businesses, however, cannot hope to make huge
profits unless they are properly organized to implement their plans.’

The opportunities offered by skillful organizing are too important for the engineer
manager to ignore. This chapter is intended to provide him with some background and insights
in organizing.

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 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 structuring of resources and
activities to accomplish objectives in an efficient and effective manner.”2

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

The structure serves some very useful purposes. They are the following:

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 engineer 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.
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 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 organization 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 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,” 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 engineer manager is, therefore, warned that he must be on the lookout for the
possible difficulties that the informal groups may do to 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.

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 brings together all those involved with a certain type of product or
customer.
3. Matrix organization — an organizational structure in which each employee reports to
both a functional or division manager and to a project or group manager.

The different types of organizations, with their own distinct advantages and disadvantages,
are briefly presented on the next page.

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 organizations 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.
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 the departments are often poor.

2. Decisions involving more than one department pile up af the top management level
and are often delayed.
3. Work specialization and division of labor, which are stressed in a functional organization,
produce routine, nonmotivating 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.

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 lines in several related industries.”

The advantages of a product or market organization are as follows:

1. The organization is flexible and 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.
6. The opportunity for the development of general management skills is provided.

The disadvantages of the product or market organization are as follows:

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.

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
the length of time they were needed.”

The matrix organization is afforded with the following 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.

The matrix organization has some disadvantages, however. They are the following:

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.

TYPES OF AUTHORITY
The delegation of authority is a requisite for effect- ive organizing. It consists of three types.
They are as follows:

1. Line authority — a manager’s right to tell subordinates what to do and then see that
they do it.
2. Staff authority —a staff specialist's right to give advice to a superior.
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 function.

Staff departments include all those that provide 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.
THE PURPOSE OF COMMITTEES
When certain formal groups are deemed inappropriate to meet expectations,
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 procedures to make the committee a more
effective tool to accomplish our goals.”