UNIVERSITY OF TECHNOLOGY, SYDNEY

SCHOOL OF MECHANICAL ENGINEERING
 
 
 
 
 

46631

ENGINEERING MANAGEMENT

MAJOR ASSIGNMENT
 
 
 
 
 
 
 
 
 
 
 
 
 

ENGINEERS VERSUS ACCOUNTANTS













































Student Name: Daniel Chan

Student Number: 89256311

Lecturer: Mr Ron Rayner

Submission Date: 23-5-95
 
 




SUMMARY







In many engineering organisations, engineers do not hold senior managerial positions. It is thought that engineers are concerned more with technical details, rather than financial and legal details which is "believed" to be the requirements to hold the top position. This assumption could have a detrimental effect not only in engineering organisations and to the engineering profession, but also to the quality of life here in Australia.
 
 

Engineering is a profession that creates wealth, unlike some other professions which can only create regulations and shuffle paper. Here in Australia, our primary wealth comes from mining and farm produce. Since the demands for these commodities have leveled of, we must rely on the manufacturing and service sectors to maintain and increase our standard of living.
 
 

Value adding to the mining and farm produce commodities, is a function that only engineers can perform. Therefore, engineers have a important role to play in returning Australia back to wealth and prosperity.
 
 




CONTENTS



 
 
 
 
 
 
 
 
 
1.0 INTRODUCTION 4
2.0 ENGINEERING 5
3.0 NON-ENGINEERS MANAGING ENGINEERING ORGANISATIONS 7
4.0 ENGINEERS AS MANAGERS 10
5.0 ENGINEERING MANAGEMENT EDUCATION 12
6.0 CONCLUSION 14
7.0 BIBLIOGRAPHY 15

 
 
 
 
 

1.0 INTRODUCTION

Today, engineers are not achieving the top levels in management particularly those of engineering organisations. It is the accountants, lawyers and financiers that are holding the top managerial positions and thus leaving the engineer having a significantly less input in the control and decision making of engineering organisations. Engineers seem to have a myth bestowed upon them pertaining to the fact that there is a distinct dichotomy between engineering and management. As Young (1987; 61) states:

Accountants, financiers, lawyers, marketers, and behaviouralists often view management" as their field, specialisations or even prerogative. They are only too happy to perpetuate the myth that top leadership and management of engineering as well as all other business, industrial and governmental enterprises be preferably occupied by so-called "professional managers" like themselves. This "myth" could be caused by the belief that engineers are more concerned with technical and problem solving details of his work rather than financial and legal details involved in running a company. As cited by Babcock (1991; 353), Lawrence Grayson, recent president of the American Society for Engineering Education, explains:
 
  Engineers must be prepared for leadership - leadership in technical, corporate, and national affairs. More and more problems facing this country have strong technical components. Yet, engineers are not attaining the appropriate leadership positions and therefore have not been able to make the decisions that the nations requires. Lester Thurow, cited by Babcock (1991; 354) goes on further to explain the significance of this short coming:

These non-technical managers may understand the technologies being employed by their firms, but they donít have enough background to develop intuitions on which of the possible technologies now on the horizon are apt to further develop and which are apt to be discarded.

As a result, incumbent managers have no way to judge the merits of revolutionary changes in production technology. So they procrastinate, waiting for it to become clear which technology is best. By this time the answer is clear, foreign firms may have a two - to three -year lead in understanding and employing these new technologies.

The problem is found not just among managers of manufacturing facilities. Those in the investment and marketing communities also donít know where to place their bets. The ignorance and resulting risk aversion of the industrial manager is reinforced by the ignorance and risk aversion of his investment banker, advertising manager and accountant.

This paper discusses the reasons why engineers are in the minority of senior managerial positions and identifies its consequences. It explains the importance of engineers in senior managerial positions and the benefits that can be achieved from such position.

The writer has the utmost respect for the other professions mentioned in this paper. The writer, by no means wish to degrade or to undermine the other professions. The view that has been taken, is the view of the writer along with many other engineering professionals. It is a view point that the writer is concerned about and wishes to express.
 
 

2.0 ENGINEERING MANAGEMENT Along with a whole array of many other definitions of management, cited by Babcock (1991;9), one stands out above from the rest, being the most general and appropriate was by Pringle, Jennings, and Longnecker: "The process of acquiring and combining human, financial, informational, and physical resources to attain the organisationís primary goal of producing a product or service desired by some segment of society." The above definition is only possible by the interaction between human beings and therefore is limited by human nature. Engineering management goes beyond this statement to include the engineers educational training pertaining to technical know-how and creative problem solving abilities. Babcock (1991; 14) has cited Towne for the definition of engineering management: "The engineering manager is distinguished from other managers because he [or she] possess both the ability to apply engineering principles and a skill in organising and directing people and projects. He is uniquely qualified for two types of jobs: the management of technical functions(such as design or production), in almost any enterprise, or the management of broader functions (such as marketing or top management) in a high-technology enterprise." There are several reasons engineers can be effective in the general management of technically orientated organisations. High-technology enterprises make a business of doing things that have never been done before. Extensive planning is therefore needed to make sure that everything is done right the first time, since there may not be a second chance. Planning must emphasise the recognising and resolving the uncertainties that determine whether the desired product or outcome is feasible. Since these critical factors are often technical, the engineer is best capable of recognising them and managing their resolution. In staffing a technically based enterprise, engineering managers can best evaluate the capability of technical personnel when they apply for positions and their later performance. Further they will better understand the nature and motivation of the technical specialists and can more easily gain their respect, confidence, and loyalty. (Babcock 1991; 14).

As stated above, the engineer has a dual career path. Either leading towards to the managerial aspects to gaining the title of Manager or Director, or leading towards the technical aspects to the tides of Senior Specialist or Principal Engineer.

A study of engineers and scientist at the National Aeronautics and Space Administration (NASA) by Bayton and Chapman (1972), found three types of engineers that has fell into the above categories. These were:

1. Engineers with essentially managerial motivation and active in their efforts to move into management.

2. Engineers motivated toward being specialists and reluctant to move to management but once there they found satisfaction and challenge in the managerial role.

3. Engineers motivated toward being specialist for which management had negative appeal. They found frustration in working as managers.

Early identifications and selections of the two branches of engineering career paths would benefit the engineer as to the educational and training requirements needed, thus eliminating waste and personal frustration.
 
 

3.0 NON-ENGINEERS MANAGING ENGINEERING ORGANISATIONS

Managers of non-engineering backgrounds have the majority in holding senior managerial positions. In recent years there has been an increasing concern within the Australian engineering profession about the top or senior managerial positions in government engineering enterprises formerly held by engineers being openly advertised for and filled by "professional managers" who may be non-engineers. This appears to reflect poorly on the image of engineers as managers. The lack of broad perspective view of the top and leadership ability are implied with engineers. (Young 1987;62).

The President of the Institution of Engineers, Australia, Professor Douglas Clyde (Georg 1994 ; 26) has shown the concern of the reducing numbers of engineers in managerial positions. He states that, "the deenginecring within public service bodies is continuing."

Grayson cited by Babcock (1991; 354), backs up this point by showing the similarities here in Australia also exists in America:

"...roughly two-thirds of the seats on boards of American companies are occupied by people trained in law, finance, or accounting. Only eighty-one of the CEOs of the top one thousand American companies were educated in engineering and science The dominance of non-engineers managing engineering organisations can have detrimental consequences on the engineering profession and to the wealth of any nation. This can stem their from roots of education.

Managers from the business school faculties, especially those trained in economics and finance, will sometimes present profit maximisation as the primary goal of the firm and its managers. This model is elegant: simple and consistent it enables prediction and comparison. For most purposes this is extremely useful; it directs attention to generating additional revenues or cost cutting.

When profit maximisation is over the long term, it can handle most, though not all of the problems. The major difficulty is that the model points the manger in the wrong directions for some of the most important decisions that the manager faces. Moreover, corporate executives tell us that profit maximisation is not their primary goal. Yet business school students readily incorporate an exclusive use of profit maximisation into their own thinking, because of its simplicity and elegance. For a few, it even becomes an ideology. When profit maximisation crowds out other considerations, business schools do a disservice to the business community. (Cavanaugh 1988; 3).

The concept of "top or general managers who can manage any enterprise", should be challenged on a number of grounds. Young (1987; 62) has put together a number of statements very worthy of noting:

Firstly, in times of rapid technical change, the top manager or leaders of engineering enterprises should have sufficient knowledge and understanding of science and technology to be able to make decisions especially where the technical aspects predominate. It is inadequate to rely solely on engineering advisers who may present views but accept no responsibility.

Secondly, it is far easier for the engineer to master other aspects of the enterprise whether they be financial, legal, personnel and so on than for the non-engineer to master the fundamentals of science and technology.

Thirdly, the engineer in leadership or senior managerial roles is more likely to attain the respect, trust and support from his or her technical subordinates in the engineering enterprise than the non-engineer in technical management.

Fourthly, the ready transferability of "top management personnel" between organisations is a myth. While some individuals may possess outstanding leadership abilities in some situations, they may not be capable in other situations. Engineering organisations and enterprises involve a high degree of technological complexity. Where technological innovation and high technology are concerned, it is hard to expect accountants, lawyers and professional mangers with little understanding or knowledge of science and technology toprovide the necessary leadership.

Fifthly, the concept of "professional management" is a myth. Management exists among groups, peoples and organisations but the managers themselves do not constitute "a distinct profession". There is a difference between good management and bad management, or competent management and incompetent management but the managers themselves do not make up a professional group in the usual definition of a profession. There are some managers who may be good in one situation but poor in other situations. Similarly the are some engineers who make good design managers but poor construction, project or general managers. Managerial skills are related to particular situations. Management is essentially a leadership task in organisations. The practice of management in itself do not meet the requirements of a distinct profession. Engineering management is a essential component of the profession of engineering.

The proof of the importance of engineers as mangers can be shown in the 1986 NASA Challenger spaceship disaster. Von Glinow and Mohrman (1990;237), had stated;

"Thiokol engineers pleaded with the authorities to delay the launch. They feared the inevitable, that the cold temperatures would cause the 0-rings and joints to malfunction. Much to the nationís regret, the engineers were overruled by their management. The Presidentís Commission investigating the causes of the incident concluded that "The Thiokol Management reversed its position and recommended the launch of 15-L at the urging of Marshall (a intermediary vendor) and contrary to the views of its engineers in order to accommodate a major customer. (Presidential Commission, 1986, p. 82)"


Von Gilnow and Mohrman, continues on to say that, "Individuals who work in high tech environments were not at all surprised by this incident. To some degree it happens every day. In the final analysis decisions are routinely made by managers concerned with profit and loss statements, not engineers concerned with product integrity."

Fortunately, not all managerial decisions are as life threatening as just discussed. However, it does stress the importance of engineers holding senior managerial positions.
 
 
 
 

4.0 ENGINEERS AS MANAGERS

An encouraging sign for the engineering profession was shown in The Business Review Weekly (Gilchrist 1991; 47), in an article titled, "Engineers Push for Management Jobs". It stated that:

"It should not be surprising in the present economic climate that people who move mountains are gaining in popularity, while those who move money are loosing some of their shine. The demand for analytical and technical skills is becoming greater as Australian companies attempt to shift their emphasis from financial management to the production of wealth." This statement is backed up by Professor Douglas Clyde (Georg 1994;26); "....Clyde said, there seem to be some moves to better acknowledge the contribution of specialists engineers by creating career structures that enable the specialists to end up with the same sort of salaries and status as managers. He quoted a shipbuilder in Melbourne as an example. The company now recognises the value of its top engineering specialists by rewarding them in the same way as its managers, he said." The above examples are good signs for engineering organisations, the engineering profession and the recovery for Australia as a nation. However there is still a long way to go. The engineering profession must not throw the "baby out with the bath water" by diverting the engineering skills of the nation, essential for its technical growth, into general management.

It must strive for at least equal recognition and status for technical positions in corporations with those of general management. (Ritchie 1991; l 13).

If engineering is to remain an influential profession, engineers must develop a capability of conducting the profession in new ways while maintaining excellence in technology, despite the changes in the managerial and industrial environments.

The engineers, who lead the profession, both in their organisation and in the Institution, must be able to bear a credible combination of technology, economics, and social awareness to their decisions and actions. The assertion of the competitive edge of engineers requires the pursuit of excellence in four ways that are interdependent (Lloyd 1987;43):

· In engineering technology, to ensure a continuing capability within the profession for the service of the nation.         · In engineering management, to ensure engineering technology is managed well. · In general management, to ensure that engineers are adequately represented at policy levels.

· In consulting practice, to take u(iome of the voids created by flat organisational structures and to remove as much of engineering as possible from the corporate patronage of governments.

A company today, can no longer survive if management uses high factors of safety because of lack of information or experience. The degree of information available to the manager must be more sophisticated so that the degree of uncertainty can be reduced. The quality of product must be greater so that the factor of safety and production margins can be reduced, in order to maintain profitable operation. I believe that engineers have a much better understanding of these notions of risks and uncertainty than many people in the community. (Ritchie 1991 ; 116).
 
 

The engineering profession is a problem solving, creative, and wealth generating profession, unlike some other professions which can only create regulations and shuffle papers. As international commodity prices have dropped consistently during the past two decades, Australia would need to increase continually the volume of its commodity exports. This

involves producing the right product of the highest quality at the right time and at a competitive price. Countries that add the most value to the manufactured products will end up the wealthiest. Australia has an abundance of minerals and farm produce. Adding value to these commodities is not only desirable but also vital to Australiaís prosperity. No other profession but the engineer can perform this value adding activity. Therefore, we, engineers have a very important role to play in returning Australia back to the wealthiest nation again.(Lin 1991;69).

As a backing to binís testimony, Grayson cited by Babcock (1991;354) have some comparisons with some wealthy nations, with the number of engineers they have as leaders, and on the board of directors:

"In France, most of the leaders of business and government have graduated from the elite Grand Ecoles. The approximately 175 schools concentrate primarily on teaching engineering and technology. In West Germany, a majority of the corporate leaders are alumni of the technical universities, whose graduate engineers have completed a period in industry and a thesis on an industrial problem. In Japan, more than 65 percent of the members of the boards of directors of the nationís leading companies have graduated from engineering and science programs, not graduate schools of business."
 
 
 
 
5.0 ENGINEERING MANAGEMENT EDUCATION

Engineering management education can only help to improve the image of engineers as managers, and provide them with the essential skills to perform their duties well.

Professor Douglas Clyde (Georg 1994; 29) states that universities should provide undergraduates with broadly marketable abilities, not locking them into generalists or specialists training. He believes more emphasis has to be placed on postgraduate education. This allows the first degree to remain more general.

There are three types of engineering management study available. These are:

1. Undergraduate

2. Postgraduate

3. Continuing Education

The undergraduate course should lay the basis for future studies in engineering management at post graduate and continuing education levels. The best approach is a multi-staged injection of management studies into each year of their course, of a minimum of three hours per week. (Young 1987; 63).

The postgraduate studies consist of the MBA; Masters of Business Administration, Masters of Engineering Management and various graduate diplomas. The MBA course does not cater for the particular needs of the engineer. (Young I 987;64). Because of this, in 1984 a Masters of Engineering Management was established at the N.S.W. Institute of Technology, now known as the University Of Technology, Sydney.

Continuing engineering programs are held at TAFE colleges, however they do not always result in a award.

Engineering management is a essential element of the engineering profession. The future status of the profession lie not only in technical excellence but how well engineers perform in various managerial roles. (Young 1 987; 65).
 
 
 

6.0 CONCLUSION

Engineering management must exist, not only for the well being of the engineering profession, but for the well being of engineering organisations and for the prosperity of Australia.

Within an engineering organisation, the engineering manager will command the respect of his or her technical subordinates to work together successfully as a team. A non-engineer who will not be able to gain their respect or loyalty, primarily because of the lack of technical knowledge.

The engineer can use his unique creative problem - solving capabilities to solve problems that can hinder organisations. The understanding of current and future technologies will enable him to make decisions vital for the organisationís journey into the future.

The engineering profession is the only profession that can generate wealth. If Australia can

improve on the export of manufactured products, instead of relying on its minerals and farm produce, Australia will have the opportunity of being the "lucky country" again.

The study of engineering management will equip engineers with managerial skills which will play a significant role in decision making within value adding organisations,. inturn raising the living standard of Australia.
 
 

7.0 BIBLIOGRAPHY

Babcock, D. L. (1991). Managing Engineering And Technology, U.S.A. Prentice Hall, Inc.
 
 

Baron, J.A., Chapman, R.L., (1972). Transformation of Scientist and Engineers into Managers. NASA Document SP-291. Washington, D.C., NASA.
 
 

Cavanagh, Gerald F. , McGOVERN, Arthur F. , (1988). Ethical Dilemmas In The Modern Corporation. U.S.A. Prentice Hall, Inc.
 
 

Georg, Dietrich., (1994). Looking Into The Future At 75, Engineers Australia. April. lEAust.
 
 

Gilchrist, M., Engineers Push for Management Jobs. Business Review Weekly , February 22 1991.
 
 

Lin, G.C.I., (1991). Engineersí Role in Managing Australia to Prosper. National

Engineerin2 Management Conference "Managing inaChangingFuture", Adelaide, October

1991. lEAust.
 
 

Lloyd, B.E. (1987). Engineers and Management Change: Promotion of Performance. Conference on Engineering Management 1987, Brisbane, September 1987. lEAust.
 
 

Ritchie, J.B. (1991). Professional Engineers as Executive Managers. National Engineering

Management Conference "Managing in a Changing Future" , Adelaide, October 1991.

IBAust.

Von Glinow, M.A., Mobram, S.A. (1990). Managing Complexity in High Technology Organisations, U.S.A. Oxford University Press.
 
 

Young, E.J. (1987). Engineering Management Education in Preparing Engineers for Leadership Roles in Australia. Conference on Engineering Management 1987. Brisbane, September 1987. lEAust.