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Introduction to Management Challenges for Engineers
1.1 Introduction
In our modern-day economy, customersâ needs are changing rapidly, the marketplace is becoming global, and technology is advancing at an ever-increasing speed. To maintain competitiveness in such a challenging environment, companies need effective leaders who understand both technology and business. Engineers with proper management training have great opportunities to make valuable and lasting contributions (Chang 2005; Merino and Farr 2010).
In industry, managers are select employees entrusted with the responsibilities of putting communications means to use, making critical decisions, taking decisive actions, applying resources, and guiding the behavior of internal teams and external business partners to achieve company objectives (Shah 2012; Gomez 2014).
The communications means applied by managers may be verbal or written, with or without body language. The decisions made take into account technical feasibility, resources conservation, and economic viability. The actions taken include planning, organizing, leading, and controlling. The resources utilized involve people, time, capital, equipment, facilities, technology, know-how, and business relationships. The teams guided by managers are individual employees (teams of one), projects, task forces, quality circles, and others. The external business partners may include customers, suppliers, networked partners, and joint ventures or otherwise aligned companies. For individual science, technology, engineering, and math (STEM) professionals to succeed in such an environment, they need to heed the advice of Henry Ford, who said, âThe only real security that a man can have in this world is a reserve of knowledge, experience and ability.â
This chapter starts with a brief review of the major sectors of a national economy. Then, it discusses the work of engineering managers and practicing engineers, and delineates the differences between these two types of work. Finally, the chapter addresses the challenges faced by engineering managers in the global environment.
1.2 Definitions
It is proper to begin with the language of management. The following are a sample of management terms that will be used frequently throughout this book (Weske 2012).
1.2.1 Management Responsibilities
The management group of a company has the overall responsibility of achieving the companyâs objectives and meeting the diverse expectations of its stakeholders. The management group is composed of managers at various levels, from chief executive officer (CEO) down to first-line managers (e.g., supervisor, group leader, section head, and manager).
The stakeholders are groups of people who have a stake in the companyâs performance. These include shareholders, customers, suppliers, employees, and the community in which the company operates. Typical expectations of these stakeholders include:
1. Shareholders: Return on investment, dividends, earnings per share, and appreciation in stock price over time
2. Customers: Quality of products, acceptable services, flexibility of company to accommodate changing customer needs, efficient delivery, and competitive prices
3. Suppliers: Financial stability, market share position, quality production, collaboration efficiency, and on-time payment
4. Employees: Innovative company policy and culture, good working conditions, stable employment, and competitive salary and benefits
5. Community: Environmentally clean, tax contribution, socially responsible, ethically acceptable practices, and good corporate citizenship
Over time, company management is responsible for satisfying this diverse set of expectation of all stakeholders.
1.2.2 Type of Work
Work is the task performed to add value to the company. Performing the work involves the use of resources (e.g., time, money, energy, tools, human efforts, technologies, and facilities) and applicable procedures. There are three types of work:
1. Management work: Plan, organize, lead, and control the efforts of self and others; this requires thinking.
2. Technical work: Specialized, nonmanagement work done by engineering managers if others cannot do it for them; this requires doing.
3. Operating work: Management and technical work that has been delegated to others; this requires monitoring and controlling.
1.2.3 Chain of Command
The chain of command refers to the chain of direct authority relationships between superiors and subordinates. This is derived from the traditional military systems.
1.2.4 Principle of Unity of Command
According to this principle, an individual worker reports to a single superior.
1.2.5 Efficiency
Efficiency refers to the accomplishment of a given task with the least amount of effort. Being efficient means not wasting resources (e.g., time, money, equipment, facilities, skills, talents, and management attention).
1.2.6 Effectiveness
Effectiveness refers to the accomplishment of tasks with efforts that are commensurate with the value created by these tasks.
The paradigm âAll things worth doing are worth doing wellâ should be replaced by âAll things worth doing are worth doing well only to the extent of their contributed value to the company.â Engineers and managers need to be value conscious. Perfectionists have no place in a progressive industrial environment.
1.2.7 Strategic and Operational (Tactical) Decisions
Strategic decisions are those that set the direction for the unit, department, and company. These decisions determine what are the right things to do. Examples include which new markets to pursue, what new products to develop, who should be engaged as supply chain partners, and when the right time is to acquire which new technologies to enhance competitive advantages. Operational decisions are those that specify ways to implement a specific task, project, or program. They define how things are to be done correctly.
STEM professionals with managerial responsibilities are involved in making strategic decisions. Others working as technical contributors are typically involved with decisions that are operational in nature.
1.3 Employment Trend in Industries
Graduates of STEM disciplines are typically employed in for-profit industrial companies, which design, produce, market, and service products or services or both to their business clients or individual consumers in the marketplace. In this section, discussions are offered regarding the differences between products and services, the major trend regarding employment into the future, and the special skills needed for STEM graduates to be successful in the years ahead.
1.3.1 Products versus Services
Products differ from services in a number of ways. According to Tidd and Bessant (2013), there are six characteristics that could be used to differentiate them:
1. Tangibility: Products are more tangible than services.
2. Perceptions: Product quality is assessed based on criteria such as functionality, reliability, durability, and maintainability. Service quality is, on the other hand, perceived based on physical evidence (the physical setting where the service is offered), responsiveness (speed of service and willingness of staff to help), competence (ability to perform the service dependably), assurance (knowledge and courtesy of staff and ability to convey trust and confidence), and empathy (provision of caring and individual attention).
3. Simultaneity: Products are typically made in advance of consumption, whereas services are consumed mostly at the time of production. Simultaneity brings about the potential for quality management problems related to the identification and correction of service errors as well as capacity-planning problems to match supply with demand.
4. Storage: Capacity-management problems may arise due to an imbalance between supply and demand. Such problems may be mitigated by pricing (e.g., discounts at off-peak time to induce demand), adding temporary workers or outsourcing or both.
5. Customer contact: Services demand a high level of customer contact, some more (medical, business consulting) and some less (financial service, information), whereas products are typically sold in the absence of much customer interaction.
6. Location: The proximity factor is more important for services than for products, making services more local and less competitive. Only about 10% of services in the developed economies are traded internationally.
Osterwalder and Pineur (2014) added a few more comparisons between the key features of products and services. Intellectual property rights are very important to products, but not so to services. Products are important as complementarities to other offerings of the same companies, whereas services are not so. For producing products, there is a fixed cost structure, which allows realizable gross margin to increase with production scale, whereas services are predominantly produced on a variable cost st...