Conflict Between Engineering and Marketing Interface - Assignment Example

Management for Engineering Name Subject Institution Instructor Date Part A 1What are the critical issues? One of the major critical issues in this study is conflict between engineering and marketing interface. These two aspects are considered crucial for thriving development and commercialization of company products. However, it has been identified that engineers and marketers conflict can be a very large barrier to effective cooperation and coordination as noted by Gupta (2010). From this analysis Clark and Company, the third largest company in supplying bathroom fittings for home and commercial use is facing fierce competition arising from customer preference and cost of equipment. The company is also involved in some advertising problems. Much of the money allocated for advertising was used for other activities. This made the company to miss an opportunity to show off their product, which could have otherwise lead to lose of revenue. The nature of the corporate culture is another aspect that is critical to this analysis. Clark and company culture can be described as non cooperative. There is an outright conflict between marketing and engineering. Engineers believed that they had freedom of designing new products, whereas the marketers wanted approval that engineering only produced products that could be sold. This was found from interviewees conducted with marketers and engineers. Fromm the interviewees critical issues that were discovered is that Engineers believed; That they were loaded with work and the marketers’ prepositions were coming between them and their job preventing them to effectively produce their products That marketer did not understand that engineers had a lot of work to do rather than just develop new product. That marketer should move out of the way for engineers to complete their job effectively. That marketers lacked know how on what they want to be produced and thus marketers should not expect engineers to stop what they are doing. Engineers felt that marketers did not understand the problem that they were facing. There were 375 different projects that they had to implement; some of them having been requested by the marketers. Marketers believed That their livelihood rested on income generated from trade shows. They believed that they had to work in conjunction with engineers to make sure that marketing schedule was met. This was due to the fact that it took four to six months to produce a new product. The marketers failed to understand why the engineers couldn’t understand the importance of trade shows. That marketer had to rush into project without all the information. Marketers sometimes rushed to implement customers’ ideas for new products and get more clarification and specification later. Sometimes marketers had to work with the customer for months to obtain the required information. This seemed to provide a problem to engineers. Thus, from the analysis, some barriers were outlined as the main cause of conflict between marketers and engineers: poor communications, lack of management support in development of new product, insensitivity towards each other, differences in culture and personality in engineering and marketing personnel, and wrong information on the function of different departments which are essential as highlighted by Larson (2001). Need to manage diversity through new product development; product customization and marketing are other critical issues that lead to conflict between the marketers and engineers. Due to this conflict it becomes fierce to implement project management. It even caused many employees from shunning from becoming project managers. Organization was divided as functional team members refused to attend meeting in order to work on their own projects rather that what was needed. Line managers seemed less interested in supporting and helping project management. There was animosity in the organization as the project management was disliked because procurement manager was not willing to assign any of the employees in his docket to project team. The procurement manager had mandated that all organization projects should come through him. He did this claiming that it would protect them from conflict existing between marketing and engineering. 2. Obstacles in getting marketing and engineering to come to an agreement in achieving same methodology for project management The major obstacles in making the marketers and engineers to work together in achieving same methodology for project management is lack of cooperative culture between engineering and marketing. Engineers believe that they have freedom of designing new products whereas the marketers believe that they have final approval of making sure that what has been designed by engineers can be sold. Low level of integration between engineers and marketers is perceived to be a main why engineering and marketing don’t agree. Engineers believe that they don’t need marketers being involved in their work because they have much work than just developing new product. Another obstacles existing between marketers and engineers in agreeing for a single methodology that can be used for project management is insensitivity towards each other. Engineers believe that marketers should spend their time in bar rooms and country club to allow them to finish their task without interruption. Considering that marketers are very significant personnel’s in an organization, engineers’ idea can be considered as insensitive to the mandate of the marketers. As noted by Westbrook (2001), when some company employees feel superior to others, cooperation and coordination becomes a challenge. Another obstacle is poor communication in the organization. Lack of knowledge about the role played by different personnel has made engineers believe that marketers are not aware of what they are doing in the company. This can be intimidating as some personnel may feel inferior to others making it a challenge for the two groups to come together for the common good of the organization. Lack of market knowledge on the part of engineers is another obstacle analyzed. Marketers derive their income from trade show. To ensure effectiveness in their operation they require engineering cooperation to ensure that marketing schedules are met. Engineers don’t understand significance of trade shows and thus cannot support the marketers in their bids. Lack of management support in having an integrated approach that can be used in developing new product is another challenge. Company management knows that marketers require about four to six months in developing a new product. Sometimes marketers have to start projects with clear definition of the requirement. Failure of the management to communicate this to engineering may make this to be a problem and may cause conflict making it difficult for integration. Failure of the marketers to understand the extent and the breadth of work involved in the engineering sector makes engineers feel that marketing is insensitive to their problem, whereas they may not be aware. It is the mandate of the management to communicate this to marketers to ensure that there is a mutual understanding in the organization. 3 Project Management improvements on Clarks operational and the steps recommended In order to improve operation in Clark and Company, integration between marketing and engineering is a requirement. Marketers need to know something about engineering and engineers need to know something about marketing. Project Management should provide marketing training to engineers and engineering training to marketers. This will help in creating understanding, positive attitude and trust, reduce cultural differences, and reduce friction between marketers and engineers. Project Managers should ensure that information obtained from the engineering department is related to production processes, product characteristics length of time to produce a given product and the quality of the product. On the other engineers need to access information regarding customer expectations, sales and marketing methods, trade show and market conditions. Project Managers should also ensure that interdepartmental relationship is progressed. They also have the mandate of ensuring remedies in areas of cultural differences, product and processes technicality, and incompleteness of the goals (Westbrook, 2001). Interdepartmental integration has an effect on the performance criteria of developed product, customer satisfaction, market share, retention of sales and growth in organization profitability. Integration between engineering and marketing would ensure that the personnel learn from each in developing quality relation between the two departments (Advani, 2006). This would eventually reduce conflict because integration between departments significantly affects the performance of the company. Thus project management must take every precaution in training all organization personnel on functionality of different departments and their significance to an organization. It is also necessary that some informal or formal psychological training should be given to the employees on cultural differences in order to reconcile goals that, are incompatible and to enable different staff in the organization to rhyme on what the company requires of them and, to realize that their purpose in the organization is to work towards similar ultimate goal (Chiu and Chan, 1998). Management should participate and support training and education process as this is the key factors in reducing organization conflict as it promote integration between different departments. As noted by the American Society for Engineering (2008), marketing and engineering orientation is facilitated by amount of emphasis that the top managers places on them through continual reminder that this aspects are critical for company development and wellbeing. Project managers should ensure that there is interdepartmental dynamics in the company as they play a very important role in employees’ orientation. Interdepartmental integration contributes to market and engineering orientation. The processes of interdepartmental integration include communication between department and being at a close physical proximity. Recommendation From this analysis it was realized that there is a is big barrier between engineering and marketing which includes poor communication, lack of management support, insensitivity towards each that; Good communication system between different departments should be put in place to ensure that each department is aware of what their counterparts are doing. Staff should be sensitive towards each other. Superiority and inferiority complex should not arise in the company as all the staffs are required to perform their tasks towards the same objective. Management should support the department in solving their differences by clarifying to them the significance of each department. This can be done through training and education. Difference in culture and personalities should be taken as a source of strength through sharing of ideas rather than a source of conflict. No employees should regard his culture superior to others. Disciplinary measure should be taken on all employees who communicate message of hate in the organization likely to cause conflict. Teamwork between different departments should be encouraged so as to improve relationships. Part B Capital costing is an important aspect in deciding whether a given project has to be invested in a given firm as noted by Berk (2008). The organizations have to use various methods so as to ascertain whether a given project is viable or worth investing in it. Net present value gives the sum of the discounted future cash flows lessen the total cost that are involved in undertaking a particular project. Net present value NPV=C+R+A+M-S C=Initial cost R=Present value of replacement cost A= present value of repairing and maintenance M=present value of non recurring S=Future value =£250011.58 Where I= present value allotted =the stated cash period that would be received in period of t=1..., n I=the required rate of return t= time utilized Cost of machine = £230 000 Savings= £27000 Maintenance= £7500 at a rate of 5% per year Useful life= 10 year Residual value =£ 35000 Cost of capital=8% Calculation of NPV P=A[] £7500[= £57913.32 Salvage 54000(= £2501.57 Depreciation (230000-35000)/10=19500 NPV=-£230000+£215040)= £14950 Payback period 230000/157127=1.46 years. Since the NPV is a positive value the project is worth being invested. This is an indication that the initial investment that was set has been recovered. Additionally, the positive value indicates that the, initial rate of return of the project has also been recouped. There is also an excess in return in the amount of initial investment and the initial rate of return. Moreover the payback period for the project is shorter and the returns of investments would be experienced much earlier. The decision to be made is whether a certain project could be accepted or rejected. In this regards, implementing such a project should be such that its cash flow do not affect the cash flows of the rest of the projects or investments. The project is acceptable since, its internal rate of return is higher than the recommended rate of discount. The decision made is important as they affect the future cash flow of a given firm. As stipulated by Bhagat, S., and Bolton (2008), in making the strategic decision on whether to invest on a particular project, it is worth to consider the functionality of the equipment being considered. In this case study, the new packaging system that would be installed has to meet the standards in the manner that it would be maintained. The decision is paramount in ascertaining whether to only replace some specific parts of the equipment or replace the whole equipment (Foster, 2004). In calculating the net present value, a positive value indicates that the project would be of fruitful returns. This suffices well such that, the whole machine could be replaced. Any firm would aim in expanding their output. It is worth to consider the level of expansion of the firm in accordance with the strategic plan. This may entail producing more products that would venture into the new market. The management personnel have to consider the factor of risks using the NPV method so as to ascertain the viability of such an investment thriving well. In a scenario where the firm does not invest, it is apparent that the net present value would be zero. The aspect of decision making in any organization tends to be a complex phenomena amongst various managerial levels. This is so paramount in an engineering firm where there might be controversies amongst the production sector and the marketing sector. The management has to consider the working capital, considerations on taxes, disposal values and the future expected taxes (Panneerselvam, 2001). A firm that posses a low rate of return and having short payback may be preferred to the one that has a long payback period and high rate of return. This is because most firms would prefer a high rate of returns so as they may invest the cash in other projects. Essentially, the NPV gives an evaluation in the manner in which a given project would be maximized so as to obtain the maximum output. Having a net present value which is positive indicates that this project is viable and the project could be implemented. The decision made should be dependence on the given strategic position in which there may be some explicit conditions that may not be fully explained in the calculations. The Company has always relied on the Payback method when deciding upon investments you must therefore explain what the differences are between the methods and why NPV is a more reliable method for a project such as this. Payback period is mostly used by many firms in order to decide on whether to invest on a given project. This is based on the fact that, this method tends to focus on the energy efficiency which is a key aspect in the process of any firm as noted by Kachani and Jerome (2005). It also provides a quick decision on whether to invest in a ascertain project rather than basing on many factors that may take a lot of time. Payback also suffices well in new companies that are entering in the market for the first time. Additionally, it a most understood technique that would enable the management to comprehend the consequences of investing in a certain project as noted by Bierman and Seymour (2007). It is also not very dependent on the discount rate as compared to the NPV method. NPV is usually very sensitive on any amount of the discount rate and may cause a great difference. In using NPV, one has to be extra careful so as to select the appropriate discount rate that would give a proper forecast of the market value. This technique aids in determining whether the firm would increase its investments in accordance with the firm’s value. It also aid in considering the nature of the cash flow as it considers the given time value allotted on money (Berk and Peter, 2007). NPV also puts more emphasis on the future risk in the implementation of a given project. Net present value is computed in terms of currency. On the other hand, the payback period does not consider the time duration that is required to recoup the investment that was allotted to a given project. It is computed in terms of time or a specific period Bierman and Seymour (2007). Additionally it does not put into focus the risks or the financing that are involved in a given project. This technique also assumes the time period that is involved after a certain payback period has been made. Another limitation emanating by use of payback period is that it tends to overlook the long term projects that may entail, research and the development of new products into the market. It gives an assumption on yet to be determined usefulness of these assertions as noted by Kachani and Jerome (2005). A disadvantage of this method is that, it may not suffice well in items or projects that have a very short duration such as electronic components. References Advani, R., 2006. The Wall Street MBA: Your personal crash course in corporate finance. New York: McGraw-Hill. Bierman, H. and Seymour, S., 2007.The capital budgeting decision. New: Routledge, Berk, B. and Peter, D., 2007. Corporate finance. Boston: Pearson Addison Wesley. Berk, J., 2008. Corporate Finance. [S.l.]: Pearson Education. Bhagat, S., and Bolton, B., 2008. "Corporate governance and firm performance." Journal of corporate finance, 14(3), pp.257-273. Chiu, C. and Chan, P., 1998. "Capital budgeting decisions with fuzzy projects." The engineering economist, 43(2), pp. 125-150. American Society for Engineering, 2008. Engineering management leadership in action: The 29th American Society for Engineering management national conference, 12-15 November 2008, Hosted by The Department of Systems Engineering of the United States Military Academy, West Point, New York. [Rolla, MO]: ASEM, American Society for Engineering Management. Foster, E., 2004. Engineering economics. Champaign, IL: Stipes Pub. Gupta, K., 2010. Engineering management. New Delhi: Chand. Kachani, S. and Jerome L., 2005. "A Robust optimization approach to capital rationing and capital budgeting." The engineering economist, 50(3), pp.195-229. Larson, A., 2001. Management engineering. Chicago: HIMSS. Panneerselvam, R., 2001. Engineering economics. New Delhi: Prentice-Hall of IndiaRoss, Stephen A., and Randolph, W., 2005. Corporate finance. Boston: McGraw-Hill/Irwin Tschoegl, E., 2007. "McDonald's -- Much Maligned, But an Engine of Economic Development." Global economy journal, 7(4). Westbrook, D., 2001. Engineering management: It's about people : Proceedings of the 2001 National Conference of the American Society for Engineering Management, October 11-13, 2001, Marriott Hotel, Huntsville, Alabama. United States: American Society for Engineering Management. Read More

Failure of the marketers to understand the extent and the breadth of work involved in the engineering sector makes engineers feel that marketing is insensitive to their problem, whereas they may not be aware. It is the mandate of the management to communicate this to marketers to ensure that there is a mutual understanding in the organization. 3 Project Management improvements on Clarks operational and the steps recommended In order to improve operation in Clark and Company, integration between marketing and engineering is a requirement.

Marketers need to know something about engineering and engineers need to know something about marketing. Project Management should provide marketing training to engineers and engineering training to marketers. This will help in creating understanding, positive attitude and trust, reduce cultural differences, and reduce friction between marketers and engineers. Project Managers should ensure that information obtained from the engineering department is related to production processes, product characteristics length of time to produce a given product and the quality of the product.

On the other engineers need to access information regarding customer expectations, sales and marketing methods, trade show and market conditions. Project Managers should also ensure that interdepartmental relationship is progressed. They also have the mandate of ensuring remedies in areas of cultural differences, product and processes technicality, and incompleteness of the goals (Westbrook, 2001). Interdepartmental integration has an effect on the performance criteria of developed product, customer satisfaction, market share, retention of sales and growth in organization profitability.

Integration between engineering and marketing would ensure that the personnel learn from each in developing quality relation between the two departments (Advani, 2006). This would eventually reduce conflict because integration between departments significantly affects the performance of the company. Thus project management must take every precaution in training all organization personnel on functionality of different departments and their significance to an organization. It is also necessary that some informal or formal psychological training should be given to the employees on cultural differences in order to reconcile goals that, are incompatible and to enable different staff in the organization to rhyme on what the company requires of them and, to realize that their purpose in the organization is to work towards similar ultimate goal (Chiu and Chan, 1998).

Management should participate and support training and education process as this is the key factors in reducing organization conflict as it promote integration between different departments. As noted by the American Society for Engineering (2008), marketing and engineering orientation is facilitated by amount of emphasis that the top managers places on them through continual reminder that this aspects are critical for company development and wellbeing. Project managers should ensure that there is interdepartmental dynamics in the company as they play a very important role in employees’ orientation.

Interdepartmental integration contributes to market and engineering orientation. The processes of interdepartmental integration include communication between department and being at a close physical proximity. Recommendation From this analysis it was realized that there is a is big barrier between engineering and marketing which includes poor communication, lack of management support, insensitivity towards each that; Good communication system between different departments should be put in place to ensure that each department is aware of what their counterparts are doing.

Staff should be sensitive towards each other. Superiority and inferiority complex should not arise in the company as all the staffs are required to perform their tasks towards the same objective. Management should support the department in solving their differences by clarifying to them the significance of each department.

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