Management. Managing Organisation - Assignment Example

?ENGINEERING MANAGEMENT ENGINEERING MANAGEMENT School ENGINEERING MANAGEMENT 2 Table of content Part A Personality of a manager in daily run of the organization 2. Characteristics of management styles 3. Types of organizational structure 4. Emphasis of the company’s projects 5. Selection of staff for the company Part B 6. Market research 7. Creation of a business plan 8. Vital aspects of management in manufacturing 9. Supply chain management and related managerial issues 10. Sustainability and ethical issues in today’s market ENGINEERING MANAGEMENT 3 Part A 1. Personality of a manager in the daily run of the organization Undoubtedly the personality of a founder or a manager influences greatly the daily run of the organization. Fortunately there is no one recipe on how to become effective and successful manager to suit every individual in managing position. Companies and businesses use varied approaches in managing their employees successfully. Many renowned individuals with different sets of personality traits manage their companies, handle the situations and operate in highly competitive world daily in a way that inspires their people. What is it in their personalities that makes them influence run of an organizations in a way that makes every day count and motivates and drives their staff to achieve more and strive for more? There is good news for every manager to be or every one that is in a management position already. You do not have to be born an excellent manager but you can learn from others, educate yourself on a subject of successful management and use principles that are recommended by specialists in the field. And as importantly you can gain experience and learn from failures. Let’s examine how personality of James Dyson, engineer by education, British inventor, founder and CEO of the Dyson company, affects daily run of his business. In one of his interview J. Dyson says that “people have huge advantage if they are capable of being radical” (Dyson, 2011). J. Dyson goes on to explain how he challenges accepted way of doing things with his team of scientists. Throughout the interview he emphasizes importance of innovations, ability of working smart, perseverance and being willing to take risks. To the question, “Did you have help in the beginning?”, J. Dyson’s answer starts with words “people are important” (Dyson, 2011). It shows that J. Dyson values people and wants to help to them to develop desire to create, courage to innovate and learn from failures for the sake of innovations. It’s so important to him that he says that “people ENGINEERING MANAGEMENT 4 that are gonna survive . . . are people who can make something that works the best” (Dyson, 2011). It’s evident that the desire to innovate made him into who he is and he is passionate to share that desire with people on his team. J. Dyson has clear vision to innovate; he is passionate about innovation and believes that future belongs to those who innovate and through innovations make world a better place. He transmits his vision and convictions in this regard to his staff and that serves as a great motivation and becomes driving force that unites people on his team. That is how he influences his organization daily. 2. Characteristics of management styles What about J. Dyson’s management style? Throughout interview he highlights several times importance of an order in improving prototypes of an invention. He considers that order to be essential to creating good invention. He also clearly describers order of applying for patent. It’s clear he expects those working with him to abide by those guidelines. In other words J. Dyson sets clear performance standards and expectations, he also believes in implementing guides and insuring that rules are followed. Those are characteristics of a directive management style. At the same time Dyson articulates and communicates clear and appealing vision to his employees and scientists. It’s a vision of improving quality of life and having “greater scope to our lives” (Dyson, 2011) through innovations. Dyson also believes in and practices intellectual stimulation by challenging accepted ways of ding things with his team. On top of it all he has certain air of charisma to his personality. He believes in what he devoted his life to. So we clearly have elements of transformational style of management. Directive style of management is associated with bureaucratic management by some sources. Professionals of Queensland Government suggest that bureaucratic approach can work well when there is a need to “maintain high quality standards in situations that require great ENGINEERING MANAGEMENT 5 attention to detail” (The State of Queensland, 2013), and creating prototypes of inventions does require such kind of attention. Transformational style in part is close to democratic “hands off approach . . . when the leader delegates many decisions” (The State of Queensland, 2013). This in turn “gives employees sense of empowerment and fulfillment and can foster creativity and innovation” (The State of Queensland, 2013) which is vital in Dyson Ltd. Summing our findings up we can say that Dyson’s management style is combination of elements of directive and transformational styles. 3. Types of organizational structure Every organization needs a structure in order to operate effectively. Nature and maturity of an organization defines what structure suits best for it. As organizations evolve and progress, they can change and enhance their structure (Tutorialspoint, 2013). Organizational structure is “the plan of the hierarchy and arrangement of work” (Bazzle, 2013). Three types of group organization are practiced in engineer groups. Small groups are usually organized informally without rigid structure. Larger projects may require hierarchical structure with different groups being responsible for different sub-projects. There are also groups that work together for longer periods of time, where members are competent and experienced in their field. Since Dyson Ltd innovates, manufactures, sells in “over 50 countries and employs 3,100 people worldwide” (Forbs, 2013), its operation requires structure that is sufficient for large organization. Different sources give different types of organizational structures, but most common are traditional hierarchical, functional, divisional and matrix (Bazzle, 2013). Traditional is effective for smaller companies and will not suit Dyson Ltd. ENGINEERING MANAGEMENT 6 Now we will examine structures that are suitable for bigger businesses. Functional structure “classifies people according to the functions performed by them in an organization”. The organization chart for functional organization . . . consists of specialized departments . . .with clear lines of authority” (Bazzle, 2013). Divisional structure is based on different divisions in the organization and is structured by product, market or location of a branch. Matrix structure “is a combination of function and product structures. It combines the best of both worlds to make an efficient organizational structure . . . It uses teams of employees to accomplish work by capitalizing on their strengths” (Buzzle, 2013) Analyzing different structures of management organization and specifics of Dyson Ltd operation, considering strong emphasis in the company on engineering and taking into account that company innovates, manufactures and sells at the same time, we can conclude, that the best and most effective structure for it would be functional or matrix. 4. Emphasis of the company In highly competitive world of global economy, different manufacturers place importance on different factors when producing. Thus cost of a product, quality of it and timing of breaking into market play vital role in succeeding or failing. Which factor does Dyson’s company considers most important in their development? It’s founder and CEO in an interview says that our world is a “global market place and anyone can make anything”, but “people that are gonna survive . . . are not the people who can make things the cheapest, but the people who can make something that works the best” (Dyson, 2011). Dyson himself invested years of his life in constructing 5,127 prototypes in order to create new technology and new type of vacuum cleaner (Forbs, 2013). His sample and words clearly indicate that his own and hic company’s emphases are on quality and creating quality products. Dyson is also "concerned that we are sometimes distracted by the glamor of web fads and video gaming ENGINEERING MANAGEMENT 7 rather than the development of tangible technology that we can export” (Forbs, 2013). Undoubtedly in his management he has to seriously consider cost and time factors in research and manufacturing, he has to work smart and be realistic, but emphasis are on quality and delivering high quality products above all. It is because prioritizing in this way led Dyson to success and he believes it to be a key to future successes in company’s marketing and development. Superior quality and innovation are strong points of Dyson’s company, whose products claimed its part of the market and won trust of customers. So it will be logical to conclude that company will stay true to what led it to success in the first place. 5. Selection of staff for the company Now Dyson Ltd is a large company with specialists in research, manufacturing, marketing and sails. We can be sure that company is looking for people to be on staff who can make company advance and stay highly competitive, people that are not afraid to make mistakes and learn fro them, people who can insure company’s forward movement, “capable of being radical” (Dyson, 2011), those that believe in their product and that their product can make “our lives more enjoyable, better, allows us to do more” (Dyson, 2011). Like in any business, it’s crucial to have people who can organize the work of a team, break into new markets and perform with results above average. It’s important to have people with vision who like their job, professionals in their field with strong sense of responsibility for company’s growth and development. Any company that wants to be a leader has to have those kinds of people, and Dyson Ltd is not an exception. Failure to select right personnel can bring downfall and gradual loosing of positions on a market. Part B 6. Market research ENGINEERING MANAGEMENT 8 In this part of the work we will analyze following scenario: An automotive parts manufacturer is planning to market a new product in UK. The finished assembly consists of number of parts. Some parts are designed and manufactured be the company and some are imported to UK. The task of a new employee is to describe what market research is and to produce forecasted business plan by using existing data. Market research is a “Scientific discovery method applied to marketing decision making. It generally comprises of (1) Market research: identification of a specific market and measurement of its size and other characteristics. (2) Product research: identification of a need or a want and the characteristics of the good or service that will satisfy it. (3) Consumer research: identification of preferences, motivation, and buying behavior of the targeted customer . . . The main objective is to find a real need and fulfill it in a most cost effective and timely manner” (WebFinance, 2013). Market research helps to have a better understanding of the potential for development of the company. “It allows business owners to determine feasibility of a business before committing substantial resources to the venture . . . in fact, strategies such as market segmentation (identifying specific groups within a market) and product differentiation (creating an identity for a product or a service that separates it ENGINEERING MANAGEMENT 9 from the competitors) are impossible to develop without market research” (Entrepreneur Media, 2013) Market research also helps to understand what kind of advertising will be most effective and find out what competition is there and how competing businesses in the same industries are doing (Cambridge University Press, 2013). It helps to indentify present and potential customers, their location, habits and needs. It helps to evaluate the whole segment of the market or industry where manufacturer plans to develop. Research about competitors is needed in order to create realistic strategy of winning in highly competitive environment. 7. Creation of a business plan The automotive parts manufacturer in our case should conduct thorough market research in UK in order to make a decision about making investments into marketing a new product. Company has to come to the conclusion based on a research and evaluation of its resources whether this venture is going to be a successful one. Let’s say we have following forecasted data for the first year: Assembling 500 units Selling price ?20 Direct Material ?3000 Direct Labor ?4500 Variable Overheads ?2000 Fixed costs ?8000 Using this data we need to produce a forecasted three year business plan identifying the breakeven point and the projected profit if sales for the following two years are forecasted to be 750 and 1200 units. Direct materials, direct labor and variable overheads will make total variable costs of ?9,500. ENGINEERING MANAGEMENT 10 Break-even point is the point of zero loss or profit, “the point at which business starts make as much money as it spends on a particular project, activity, etc” (Cambridge University Press, 2013). Break-even point can be calculated by equation, contribution or graphical method. Equation method is based on cost-volume-profit formula. (Accounting Explained, 2013). px = vx + FC + Profit where p – price per unit; v – variable cost per unit; x – total number of units produced and sold; FC – total fixed cost. At break-even point profit is zero therefore formula is simplified to px = vx + FC Solving the above equation for x which equals the break-even pint in sales unit, we get: FC Break-even Sales Units = x = (Accounting Explained, 2013) p – v Break-even point in number of Sales Pounds is calculated using the following formula: Break-even Sails Pounds = Price per Unit ? Break-even Sails Units (Accounting Explained, 2013). Substituting the known values into the formulas for break-even points, we get: First year: p - 20, v – 19 and FC – 8,000 Break-even point in Sales Units x = 8,000 ? (20 – 19) = 8,000 ? 1 = 8,000 units Break-eve point in Sales Pounds = 20 ? 8,000 = 160,000 Second year: p - 20, v – 12.66, FC – 8,000 Break-even point in Sales Units x = 8,000 ? (20 – 12.66) = 8,000 ? 7.34 = 1, 090 units Break-even point in Sales Pounds = 20 ? 1,090 = 21,800 ENGINEERING MANAGEMENT 11 Third year: p - 20, v - 7.91, FC – 8,000 Break-even point in Sales Units x = 8,000 ? (20 – 7.91) = 8,000 ? 12.09 = 662 units Break-even point in Sales Pounds = 20 ? 662 = 13,240 Three year Business plan Year one Year two Year three Fixed costs ?8,000 ?8,000 ?8,000 Variable costs ?9,500 ?9,500 ?9,500 Units produced and sold 500 750 1,200 Price per unit ?20 ?20 ?20 Variable cost per unit ?19 ?12.66 ?7.91 Break-even point in units 8,000 1,090 662 Break-even point in pounds ?160,000 ?21,800 ?13,240 Income ?500 ?5,505 ?14,508 Profit/loss - ?159,500 - ?16,295 ?1,268 8. Vital aspects of management in manufacturing Since company is going to design and manufacture an automotive part, the use of specialized Computer-aided design (CAD) software will be required. Different software applications are used for this purpose. We need to compare and contrast such applications as CATIA and SolidWorks in order to choose which one will suit best for automotive manufacturing. According to experts’ these products offer different levels of engineering sophistication available. “Both products employ the feature-based, dimension driven solid modeling style” (My Opera, 2009). ENGINEERING MANAGEMENT 12 Major differences between CATIA and SolidWorks explained by professionals in the filed of CAD software as follows “more than 70 percent of CATIA customers make vehicles, including aircraft, automobiles, trucks, and ships. These manufacturers employ advanced analytical tools to simulate and text product performance and assure safety and reliability. CATIA also has workbenches for Automotive and incorporates specialized design software for disciplines such as wiring, sheet metal . . . CATIA is organized to fit the needs of large design teams” (My Opera, 2009) “In the field of car design, CATIA has specialized application for class A surfaces that enables workers to produce smooth mathematical surfaces for production of tools and inspection of finished parts” (TenLinks, 2002). SolidWorks does not posses above described functions and features. CATIA is also organized to fit the needs of large design teams. On a basis of it we make a conclusion that CATIA will be the product of our choice. Solid modeling simulates an object internally and externally. Solid models can be cut open “to reveal their internal features, and they can be stress tested as if they were physical entities in the real world.” (Ziff Davis, 2013). When CAD model is constructed, it is converted into needed format for creating a prototype. Solid modeling and prototyping are steps in the process of creating automotive parts in our case. 9. Supply chain management and related managerial issues ENGINEERING MANAGEMENT 13 Continuous flow manufacturing is “a manufacturing process that aims at optimization throughput using minimum inventory. This involves implementing just-in-time techniques while doing away with the batch and queue costs” (WebFinance, 2013). For example, assembly unit always has needed parts and tools available and does not spend time collecting and/or preparing them so it takes less time to produce product and make manufacturing process more cost efficient. Also stocks of raw materials and finished goods are reduced. (Oxford University Press, 2013). Jobbing is dealing with small lots of goods or acting as an agent or sub-contractor. Usually jobber does not deal directly with the customer (WebFinance, 2013). Quality cost is a total cost of insuring good quality and rectifying poor quality. Prevention and appraisal are ways of insuring high quality and are part of quality cost. Prevention costs are costs of everything that goes into preventing poor quality from occurring in a product. Manufacturer invests into quality related planning, evaluation, improvements, meetings, trainings, correcting mistakes. Appraisal costs occur when products are controlled to insure high quality and adherence to quality standards of the manufacturer. As such checking and testing, inspecting, calibrating and measuring test equipment expenses will fall under appraisal costs. The total quality cost will consist then of the sum of these costs. Budgeting for and investing into prevention and appraisal will help to reduce losses of a manufacturer. Let’s take a look now at failure costs which are costs of a poor quality and rectifying of it. These costs can be internal and external. Internal are caused by poor quality products that are detected before reaching the customer. Time and resources will be spent on reworking, making changes needed, re-testing and analyzing. Shortages and delays can occur too. External failure costs are caused by deficiencies found after the delivery of a product to ENGINEERING MANAGEMENT 14 the customer and can result in dealing with complaints and warranties, repairing goods, losses. (Buthmann, 2010). Since some automotive parts in our scenario are supplied by overseas companies we will have to establish supply chain management. It means managing information, products and deliveries with partners to provide generation, taking and fulfillment of orders at a lowest possible cost while upholding high quality standards. Manufacturer in UK extends his operation far beyond his location in this case. Before company decides to order some parts from overseas, management body has to calculate risk and costs. It may be more advantageous to produce particular item by means of the company than buy it from a supplier. When making decision whether to make or to buy, company has to consider quality and cost issues. “Bulk stock management guide” describes bulk stock as a system that “controls the storage, measurement, and movement of bulk inventory” and “you can tailor the system to handle the complexities of constantly changing inventory in your business environment. You can also track bulk inventory so that you always know the location and amount of each product available for sail or production” (JD Edwards World, 2007, p.1-1). Just in time (JIT) means “demand driven inventory system in which materials, parts, sub-assemblies and support items are delivered just when needed and neither sooner nor later . . . under JIT management shipments, are made within rigidly enforsed ‘time windows’ and all items must be within the specification with very little or no inspection” (WebFinance, 2013). 10. Sustainability and ethical issues in today’s market ENGINEERING MANAGEMENT 15 In today’s competitive market ethical and sustainability issues play a big role and can affect company’s future business. It means that company’s reputation will suffer and financial losses will occur if company will be found benefitting in some form from child or slave labor, violating human rights, treating the environment irresponsibly or being dishonest when paying taxes. Community, media, courts and competitors will do their part in exposing the problem. On other hand “the world of sustainable investing . . . seeks to leverage a company’s environmental, social, and governance (ESG) performance to identify winning stocks . . . Companies that factor ESG risks into their planning, and manage accordingly, have the potential to fair better and lend credence after all to the notion of ESG performance as worthy of market recognition” (Koehler and Hespenheide 2013, 99). In other words, company that incorporates Social Corporate Responsibility (CSR) into its activities has better chances of building “better, more resilient and valuable enterprises” (Koehler and Hespenheide 2013, 99). Sustainability of a company is ability to preserve capacity for development indefinitely without depleting human and natural resources (Cambridge University Press, 2013). Company can integrate sustainability at a design stage by making CSR obligations part of its corporate culture. Company can commit to CSR in a direction that will benefit company and community best: social, environmental or governance. ENGINEERING MANAGEMENT 16 Bibliography Accounting Explained, 2013. Break-even Point Equation Method. [online] Available at [Accessed 20 July 2013] Bazzle, 2013. Types of Organizational Structures. [online] Available at [Accessed 16 July 2013] Crimson Publishing, 201?. How to Calculate Your Break-even Point. [online] Available at [Accessed 20 July 2013] Dyson, J. 2011. Full Video – James Dyson Discuss Innovation, Bringing New Products to Market and More. [video online]. Available at [Accessed 15 July 2013] Entrepreneur Media, 2013. Market Research. [online] Available at [Accessed 17 July 2013] Forbs, 2013. The World’s BIllionaries James Dyson. [online] Available at [Accessed 15 July 2013] Buthman, A. 2010, Cost of Quality: Not Only Failure Costs. [online] iSixSigma. Available at [Accessed 18 July 2013] JD Edwards World, 2007. Bulk Stock Management Guide, revised [pdf] Available at [Accessed 18 July 2013] Cambridge University Press, 2013. Cambridge Dictionaries Online Business English. ENGINEERING MANAGEMENT 17 [online] Available at [Accessed 16 July 2013] Koehler, A.D. and Hespenheide J.E. 2013.’Finding The Value in Environmental, Social and Governance Performance’. Deloitte Review, Issue 12, p.99 [pdf] Available at < http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/ Deloitte% 20Review/Deloitte%20Review%2011%20-%20Winter%202012/us_ deloittereview_ finding_the_value_in_Jan13.pdf.pdf> [Accessed 20 July 2013] My Opera, 2009. CATIA versus SolidWorks. [blog] 14 January. Available at [Accessed 17 July 2013] Oxford University Press, 2013. Oxford Dictionaries. [online] Available at [Accesses 16 July 2013] State of Queensland, 2013. Management Styles. [online] Available at [Accessed 18 July 2013] TenLinks, WestCAM Solutions, 2002. Why Pick CATIA Over SolidWorks. [online] 2002 excerpted from CADCAMnet in CAD Digest by CAD/CAM Publishing. Available at [Accessed 18 July 2013] Tutorialspoint, 2013. Organizational Structures. [online] Available at [Accessed 16 July 2013] WebFinance, 2013. Business Dictionary. [online] Available at [Accessed 16 July 2013] ENGINEERING MANAGEMENT 18 Ziff Davis, 2013. Definition of Solid Modeling. [online] Available at [Accessed 17 July 2013] Read More