The Structure, Management and Personnel of a Company

CGLI 2800-703.

The structure, management and personnel of a company

The free flow of information between the departments of an engineering company is essential to the well-being of that company. In a small company consisting of the proprietor and two or three employees this is no problem. However, in large companies, information flow becomes more complex and companies have failed when the channels of information have broken down. In a large company it is impossible for one person to solve all the problems, make all the decisions, and carry out all the management duties. There comes a time in the development of the company when management has to be delegated. Figure 1 shows a typical management structure and the inter-relationships between the departments. This is the most common form of management ‘tree’ but there are others, lets now look at the function of the various elements of the company.

Figure 1 Typical company organisation Structure

Board of directors

The directors are appointed to the board because of their technical and commercial experience, and/or because they have influential contacts which are beneficial to the company. They are usually professionally qualified in technology, accountancy, law, banking, insurance and marketing. They plan the strategy of the company and ensure that their policy is carried out more efficiently. They sanction large scale capital expenditure and they are responsible to the shareholders for ensuring that the companies’ finances are soundly managed. In a public company the shareholders have the ultimate power to vote individual directors of the board. In fact they have the power to vote the whole board out of office if they are not satisfied with the running of the company. This rarely happens in practice.

Managing director

The directors, who are often part-time members of the board, communicate with the executive management of the company via a full time managing director. The managing director is responsible for the overall running of the company and for the implementation of the board’s policy. Alternatively, in some companies, this overall responsibility is undertaken by a chief executive. The departmental managers are responsible to the managing director for the implementation of company policy in their departments. They are expected to show initiative in solving problems, and to feed ideas back to the board via the departmental managers who are directly responsible to the managing director as shown in fig 1.

Quality control

Quality control used to be the role of the inspection department. They would inspect work in progress and the finished product and reject faulty items. This rejection represented considerable waste of time, materials and money. Nowadays quality control is a total company commitment from the board of directors to the most junior member of the company. The object is Total Quality management (TQM) so that no defective work is produced in any department or by any person in the company. This prevents waste, ensures delivery on time, and customer satisfaction. Many companies are now BS5750 approved and will only purchase goods and services from other companies who are also approved. This ensures product quality at all stages of manufacture. Because of the importance of quality control, the quality manager is also responsible directly to the managing director and has oversight of the work of every department.

Company secretary and register

The company secretary often has a legal background and will also be a member of the institute of Company Secretaries. The company secretary and his/her office are responsible for advising the managing director and the board on day to day legal matters; ensuring that the legal obligations of the company legislation are met with,; ensuring that statutory documents are kept and that necessary returns are made to the appropriate government agencies. As registrar, he/she is responsible for the issue of share certificates, the keeping of the share register, and the issuing of divided cheques. Sometimes, in very large companies, the work of the registrar is subcontracted out to firms specialising in this work.

Personnel manager

The Personnel manager and his/her staff are responsible for implementing the employment policy of the company. As its name suggest, the personnel department is concerned with all aspect of the personnel employed by the company at all levels.

Its main activities are as follows.

(a) appointments, discipline and dismissals

(b) records of all employees at all levels

(d) employees’ personal development

(e) employees’ personnel performance

(f) employees’ welfare

(g) pensions

Training manager

This is an important department and, in the larger companies, there is often a director with a special responsibility for training to support the training manager and his/her staff. Training covers a wide range of activities, for example;

(a) training graduate apprentices (technical and management)

(b) training commercial apprentices

(d) training craft apprentices

(e) training operatives

(f) Staff development programmes for existing employees at all levels particularly where new technology is concerned.

Chief engineer

The chief engineer’s department is concerned with the installation and maintenance of the plant, the installation and maintenance of factory services such as gas water and electricity, and the maintenance of the fabric of the premises.

Commercial manager

The commercial manager is responsible for all the non technical aspects of the company. For example:

(a) company finance

(b) payment of wages and salaries

(d) secretarial services

(e) purchasing

Sales and marketing manager

This is a very important department, for unless the goods manufacture can be sold, the company cannot remain in business. As described in section 1.4, marketing is a research activity to find out what the customers want in time for new products to be developed and produced, and to organise a programme of advanced publicity to prepare the market for the new products. Once this has been done and the new products are available, the work of the sales team is to go out into the market place and obtain firm orders for the products. The marketing division of the department is also concerned with finding new markets and predicting the size of those markets. It must also be able to predict when the demand for a product is coming to an end so that the company is not left with surplus and un-saleable stocks on its shelves.

Works manager

The works manager’s department can be sub-divided into a number of divisions. Let’s now consider the more important of these divisions.

Research and development

This division is responsible for the development of new products and services to satisfy future customer requirements as identified by the marketing and sales departments. It is also responsible for investigating new materials, new developments in technology, and new manufacturing techniques, particularly if they lead to improved quality at reduced cost. All this is necessary to keep the company ahead of its competitors.

Design

This division is responsible for the design of new products and the design of the tooling necessary for making those products. This not only involves the production of detail and assembly drawings but also the styling of the product so that it looks attractive to the purchaser. This is particularly important when the product is for sale to the general public, for example; cars, washing machines and televisions. Companies often sub-contract the styling to specialist studios.

Inspection and testing

This division is most important in maintaining product quality. It not only test the finished products but also the incoming materials, components and sub-assemblies in order to ensure that the company’s suppliers are maintaining the required standards. Further, it is no use waiting until the product is complete before finding out that it has been made from inferior materials. The inspection and testing division is also responsible for approving the prototypes of all new designs before they are put into production.

Planning and production

This division is concerned with planning the manufacturing programme so that the correct goods are available at the correct price at the correct time. The division must ensure that the plant and the work force are kept fully employed with a uniform work load and that production flows smoothly.

Manufacturing

This division of the department is closely associated with the planning and production division and is responsible for the actual manufacture of the company’s products in the workshops. It is also responsible for manufacturing any jigs, fixtures and special tools required in production.

Product support

This division of the works manager’s department has three areas of responsibility, all of which are directly concerned with customer satisfaction and in giving technical back-up to the sales staff.

(a) After-sales service and commissioning

(b) Applications engineering, that is, providing advice to customers on the most effective way of using the company’s products.

Supervisors

Supervisors are responsible to the departmental managers for the efficient running of their sections and divisions. They are responsible for the direct supervision of the workforce in order to ensure that the policy of the department is being properly carried out and the workforce is profitably employed. The persons filling the posts and heading the departments, divisions and sections described above may come from a variety of backgrounds and have a wide range of qualifications. In addition there will be technicians, crafts-persons and operatives concerned with the actual making of the company’s products in the workshops. Let’s now look at the technical background, education and training of some of these persons

Chartered engineers

These are technologists who hold a degree in engineering and possibly higher degrees which they will have obtained through study at a university or a polytechnic. This will have been supplemented by a post graduate apprenticeship or pupillage. They will also have a number of years experience in their chosen branch of engineering profession in a responsible position. Some older chartered engineers may have academic qualifications other than a first or higher degree. Chartered engineers fill some of the most senior technical and management posts in the company. The chief engineer and the works manager will most certainly be chartered engineers, as will the technical directors of the board.

Technician engineers

Also known as technical engineers, they may also have a degree in engineering from a university or polytechnic, or may have a Higher national Certificate or Diploma (HNC or HND) in their chosen branch of engineering. HNC and HND qualifications are usually awarded after study at a polytechnic or at a college of higher education. In a medium or large company, technician engineers will work under the direction of a chartered engineer and, in all possibility become chartered engineers in their own right when they have gained the necessary experience and responsibility. They will have undertaken an engineering apprenticeship and they will hold posts as assistant managers heading the subdivisions of the works manager’s department and the chief engineer’s department. In smaller companies the technician engineer may be the most senior engineer on site.

Engineering technicians

They usually have a national certificate or diploma in engineering and will have studied at a college of further education. They will also have undergone a technician apprenticeship. They may also be studying part-time for a higher certificate in engineering. They will work under the direction of a chartered engineer or a technician engineer and, in turn, may have crafts persons and operatives working for them. As well as being qualified technicians, the company will be looking for qualities of initiative and leadership in their technicians. This is because many technicians become section leaders and supervisors as they improve their qualifications and start to climb the management ladder.

Crafts persons

They will have received some form of practical training either through one or other of the government training schemes or through a company scheme. A few large companies still offer craft apprenticeships. Trainee crafts persons will also attend colleges of further education on a part-time basis in order to study for City and Guilds and National Vocational qualifications. Crafts persons will also have acquired considerable manual skills and experience. Again, companies will be on the lookout for signs of initiative and leadership, since many craftsperson’s’ move on to become charge hands, foremen and forewomen. Bridging courses are also available allowing persons with higher craft qualifications to bridge across to technician qualifications. They may become technicians in research and development departments and in work study where their background of practical experience is of great importance.

Operatives

They will usually have undergone limited skill training on a ‘need to know’ basis. Some may also attend a college of further education to take a course leading to a City and Guilds operative certificate. Where suitable personal qualities are shown some operatives may be trained as charge hands and machine setters. A few may take further qualifications by evening classes at a college of further education.