Engineering Management Notes - MCI260S - Cape Peninsula University of Technology PDF

MCI260S ENGINEERING MANAGEMENT Session 02: Principles of General Management Mr CJ Nel i TABLE OF CONTENTS 1. PRINCIPLES OF GENERAL MANAGEMENT....................................................... 1 1.1 What is Business?............

MCI260S ENGINEERING MANAGEMENT Session 02: Principles of General Management Mr CJ Nel i TABLE OF CONTENTS 1. PRINCIPLES OF GENERAL MANAGEMENT....................................................... 1 1.1 What is Business?............................................................................................. 1 1.2 The importance of management....................................................................... 1 1.3 Management function 1: Planning.................................................................... 2 1.4 Management function 2: Organising................................................................. 3 1.5 Management function 3: Staffing...................................................................... 3 1.6 Management function 4: Controlling................................................................ 4 1.7 Levels of management....................................................................................... 4 1.8 Areas of Management........................................................................................ 5 1.9 Management skills............................................................................................. 6 ii 1. Principles of General Management 1.1 What is Business? Business is the process of applying resources, human, material, machinery, knowledge etc., to add value which could be sold for a profit. A business is a system, with process and sub-systems which needs to be managed. Someone needs to do be in charge to make this happen. A business needs to have goals and objectives, in the short and long term. To reach those objective, skilled management is needed. 1.2 The importance of management Definition of Management: “Process designed to achieve an organization’s objectives by using its resources effectively & efficiently in a changing environment.” What do managers do? They make decisions around utilization of resources and achieve objectives in relation to: (these are called: Management Functions) o Planning o Organizing o Staffing o Directing o Controlling Managers acquire and coordinate resources to lead and manage the business to success in an ongoing basis. These resources include: People Raw materials Equipment Money Information 1 1.3 Management function 1: Planning Planning is the process of determining the organization’s objectives and deciding how to accomplish them. The business objectives are a result of what the business desired to achieve. Profit, competitive advantage, efficiency, growth etc. Service, ethics, community responsibility etc. The business mission is the business’s purpose and philosophy. This is long term and strategic in nature. Plans must be made on three levels: Strategic plans – Long term, high level, big picture plans. Tactical plans – Medium term. Operational plans – Short term, ongoing, on the ground. Strategic plans Made by executive level managers Establish the long-range objectives and overall strategy to fulfil the business’s mission Taking a 2-10 years forward-looking approach Sustainability Diversification, divestiture, mergers & acquisitions Tactical plans Short-range plans Put in place to implement strategy 1 year or less Environmental change Periodically reviewed & updated Operational plans 2  Very short-term actionable specific plans Made and executed by individuals, work groups and departments 1 month, 1 week, 1 day Achieve tactical plans There are a third set of plans, Contingency Plans (or Crisis Management Plans) These plans focus on potential disasters such as: o Product tampering o Oil spills o Fire, earthquake, terrorist attack o Unethical/illegal employee activity o Etc… 1.4 Management function 2: Organising Organising is the structuring of resources and activities to accomplish objectives efficiently and effectively. Organising is important because it: Creates synergy within the business Establishes lines of authority which is needed to run a business successfully Improves communication within the business Improves competitiveness 1.5 Management function 3: Staffing Staffing is the process of hiring people to carry out the work of the organisation to make sure that the work gets done. Staffing includes the following functions within the business: Recruiting – Acquiring human resources for the business. Determine skills – What does the organisation need to be successful? 3  Motivate & train – Motivate and train the human resource to be able to do their work and play their role. Compensation levels – What do we pay our staff to that it is worth for them working there, but also make sense for the business. Downsizing is the process of elimination significant numbers of employees so that the business model make sense in the current market it is operating in (also: rightsizing, trimming). Directing is the process of motivating and leading employees to achieve business goals and objectives. This is done by motivating the human resources: Through incentives (raise, promotion) Employee involvement (cost reduction, customer service, new products) Recognition and appreciation 1.6 Management function 4: Controlling Controlling is the process of evaluating and correcting activities to keep organization on course. Controlling consist of five Activities: Measuring performance Comparing performance against standards Identifying deviations from standards Investigating causes of deviations Taking corrective action 1.7 Levels of management The three levels of management are: Top management Middle management First-line/ supervisory management 4 Top management: Responsible for leading the organisation strategically. Making sure that in the long term the organisation survives and prosper. Roles such as – CEO, MD, Executive Director, President… etc. Middle management Responsible for tactical planning Implement general guidelines established by top management First-line/ supervisory management Supervise workers Oversee daily operations Directing and controlling primary functions 1.8 Areas of Management The following areas of management is needed to assist with managing the business successfully: Finance Production Operations Human Resources Marketing Information Technology Administration Financial Management focus on obtaining money necessary for the successful operations and using funds to further organizational goals. Production & Operations Management develop and administer activities to transform resources into goods, services, and ideas for the marketplace. 5 Human Resources Management handle staffing function and deal with employees in a formalized manner. Marketing Management is responsible for planning, pricing, and promoting products and making them available to customers. Information Technology (IT) Management is responsible for implementing, maintaining, and controlling technology applications in business (computer networks) Administrative Managers manage an entire business or major segment of the business. Coordinate activities of specialized managers. 1.9 Management skills Management skills includes: Leadership Technical expertise Conceptual skills Analytical skills Human relations skills Leadership is the ability to influence employees to work toward organizational goals. We get different types of leaders: Autocratic Leaders - Decision makers, “tell” employees Democratic Leaders - Involve employees in decisions Free-rein leaders - Employees work without interference Leaders, and manager need to be able to make decisions. The process of making decision includes: Recognise and define the decision situation Develop alternative options Analyse options Select best option Implement the decision 6  Monitor the consequences of the decision --- The end --- 7