Based on an in-depth field study in an electronics plant in Singapore, this paper examines the dynamic interaction between two of the key functions, Production (P) and Manufacturing Engineering (ME). P and ME are responsible for process execution and process development respectively, and for process smoothness jointly; their relationship is asymmetrical if judged from organizational and structural aspects. The paper reveals the causes and effects of three types of short-sighted functional behavior burden-shifting, resource-fighting, and corner-cutting. The resulting P-ME conflict due to short-sighted behaviors is analyzed in a qualitative system dynamics model. Although this research is based on a single firm, the findings have implications for many contemporary plants where the proliferation of new processes puts stress on the P-ME interface. Future researchers can use more samples to test and theorize the findings of this research.