Module 2: Planning Technical Activities

UNIVERSITY OF LA SALETTE,INC
COLLEGE OF ENGINEERING AND ARCHITECTURE

SANTIAGO CITY, PHILIPPINES
Module 2: Planning Technical Activities

Introduction
If managing an organization is to be pursued vigorously, planning will constitute the most
important activity. Managers who plan are afforded with the opportunity to carefully analyze
situations which directly contribute to effective decision-making.
The engineer manager, regardless of his management level, will have to devote some of his
time to planning. The higher the management level the engineer manager is in the more sophisticated
his planning activity becomes.
Learning Outcomes
At the end of this module, you are expected to
a. elaborate planning and its process;
b. discuss how to make a plan effective;
c. define organizing and its reasons; and
d. apply the types of organizational structure.
Preassessment:
Instruction: Answer the following questionnaire based on your personal and honest views as there are no
wrong answers.
1. Why is planning an important activity for engineer managers?
2. What purpose do organizational structures serve?
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Lecture
Topic 1: The Nature of Planning
There are many instances when managers are overwhelmed by various activities which at
times becloud his judgment. This must be expected since anybody who is confronted by several
situations happening simultaneously will lose sight of the more important concerns. To minimize
mistakes in decision-making, planning is undertaken.
A plan, which is the output of planning, provides a methodical way of achieving desired
results. In the implementation of activities, the plan serves as a useful guide. Without the plan, some
minor tasks may be afforded major attention which may, later on, hinder the accomplishment of
objectives.
An example of the difficulty of not having a plan is illustrated below.
The management of an engineering firm was able to identify the need to hire additional three
employees. The manager proceeded to invite applicants, screen them, and finally hired three of them.
When the hiring expense report was analyzed, it involved more than double the amount spent by other
firms in hiring the same number of people.
When an inquiry was made, it was found out that the manager committed some errors of judgment.
For instance, he used an expensive advertising layout in a newspaper when a simple message will do.
Also, it was found out that the absence of a hiring plan contributed to the high cost of hiring.
Planning Defined
Various experts define planning in various ways, all of which are designed to suit specific
purposes.
Planning, according to Nickels and others, refers to "the management function that involves
anticipating future trends and determining the best strategies and tactics to achieve organizational
objectives. This definition is useful because it relates the future to what could
be decided now.
Aldag and Stearns, on the other hand, define planning as "the selection and sequential ordering
of tasks required to achieve an organizational goal. This definition centers on the activity required to
accomplish the goals.
The definition of Cole and Hamilton provides a better guide on how to effectively perform this
vital activity. Planning, according to them is "deciding what will be done, who will do it, where, when
and how it will be done, and the standards to which it will be done."
For our purpose, it will suffice to define planning as selecting the best course of action so that
the desired result may be achieved. It must be stressed that the desired result takes first priority and the
course of action chosen is the means to realize the goal.
Planning at Various Management Levels
Since engineer managers could be occupying positions in any of the various management
levels, it will be useful for them to know some aspects of planning undertaken at the different
management levels.
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Planning activities undertaken at various levels are as follows:
1. Top management level - strategic planning

2. Middle management level - intermediate planning
3. Lower management level - operational planning
Strategic Planning
The term strategic planning refers to the process of determining the major goals of the
organization and the policies and strategies for obtaining and using resources to achieve those goals.
The top management of any firm is involved in this type of planning.
In strategic planning, the whole company is considered, specifically its objectives and current
resources. The output of strategic planning is the strategic plan which spells out " the decision about
long-range goals and the course of action to achieve these goals."
Intermediate Planning
Intermediate planning refers to the process of determining the contributions that subunits can
make with allocated resources. This type of planning is undertaken by middle management.
Under intermediate planning, the goals of a sub-unit are determined and a plan is prepared to
provide a guide to the realization of the goals. The intermediate plan is designed to support the strategic
plan.
Figure 3.1 Types of Planning
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Figure 3.2 The Organization and Types of Planning Undertaken
Operational Planning
The term operational planning refers to

the process of determining how specific tasks can
best be accomplished on time with available
resources. This type of planning is a responsibility
of lower management. It must be performed in
support of the strategic plan and the intermediate
plan.
Topic 2: The Planning Process
The process of planning consists of various steps depending on the management level that
performs the planning task. Generally, however, planning involves the following:
1. setting organizational, divisional, or unit goals

2. developing strategies or tactics to reach those goals
3. determining resources needed and
4. setting standards.
Setting Organizational, Divisional, or Unit Goals
The first task of the engineer manager is to provide a sense of direction to his firm (if he is the
chief executive), to his division (if he heads a division), or to his unit (if he is a supervisor). The setting
of goals provides an answer to the said concern. If everybody in the firm (or division or unit, as the
case may be) is aware of the goals, there is a big chance that everybody will contribute his share in the
realization of such goals.
Goals may be defined as the "precise statement of results sought, quantified in time and
magnitude, where possible." Examples of goals are provided in Figure. 3.3.
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Figure 3.3 Example of Goals by Organization Level
Developing Strategies or Tactics to Reach Goals
After determining the goals, the next task is

to devise some means to realize them. The ways to
realize the goals are called strategies and these will be
the concern of top management. The middle and
lower management will adapt their own tactics to
implement their plans.
A strategy may be defined as "a course of
action aimed at ensuring that the organization will
achieve its objectives.
An example of a strategy is as follows:
The decision of a construction firm's

management to diversify its business by engaging
also in the trading of construction materials and
supplies.
When the above-mentioned strategy is
implemented, it may help the construction firm
realize substantial savings in the material and supply
requirements used in their construction activities. The
firm will also have greater control in the timing of
deliveries of materials and supplies.
A tactic is a short-term action taken by management to adjust to negative internal or external
influences. They are formulated and implemented in support of the firm's strategies. The decision about
short-term goals and the courses of action are indicated in the tactical plan.
An example of a tactic is the hiring of contractual workers to augment the company's current
workforce.
Determining Resources Needed
When particular sets of strategies or tactics have been devised, the engineer manager will, then,
determine the human and nonhuman resources required by such strategies or tactics. Even if the
resource requirements are currently available, they must be specified.
The quality and quantity of resources needed must be correctly determined. Too much
resources in terms of either quality or quantity will be wasteful. Too little will mean loss of
opportunities for maximizing income.
To satisfy strategic requirements, a general statement of needed resources will suffice. The
specific requirements will be determined by the different units of the company.
To illustrate:
Suppose the management of a construction firm has decided, in addition to its current
undertakings, to engage in the trading of construction materials and supplies.
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A general statement of required resources will be as follows: A new business unit will be
organized to deal with the buying and selling of construction materials and supplies. The amount of
P50 million shall be set aside to finance the activity. Qualified persons shall be recruited for the
purpose.
Setting Standards
The standards for measuring performance may be set at the planning stage. When actual
performance does not match with the planned performance, corrections may be made or reinforcements
given.
A standard may be defined as "a quantitative or qualitative measuring device designed to help
monitor the performances of people, capital goods, or processes."
An example of a standard is the minimum number of units that must be produced by a worker
per day in a given work situation.
Types of Plans
Plans are of different types. They may be classified in terms of functional areas, time horizon,
and frequency of use.
Functional Area Plans
Plans may be prepared according to the needs of the different functional areas. Among the
types of functional area plans are the following:
1. Marketing plan- this is the written document or blueprint for implementing and controlling
an organization's marketing activities related to a particular marketing strategy.
2. Production plan - this is a written document that states the quantity of output a company
must produce in broad terms and by product family.
3. Financial plan - it is a document that summarizes the current financial situation of the firm,
analyzes financial needs, and recommends a direction for financial activities.
4. Human resource management plan - it is a document that indicates the human resource
needs of a company detailed in terms of quantity and quality and based on the requirements
of the company's strategic plan.
Plans with Time Horizon
Plans with time horizon consist of the following:
1. Short-range plans — these are plans intended to cover a period of less than one year. First-line
supervisors are mostly concerned with these plans.
2. Long-range plans – these are plans covering a time span of more than one year. These are
mostly undertaken by middle and top management.
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Plans According to Frequency of Use
According to frequency of use, plans may be classified as:
1. standing plans and

2. single-use plans
Standing Plans. These are plans that are used again and again, and they focus on managerial situations
that recur repeatedly.
Standing plans may be further classified as follows:
1. Policies – they are broad guidelines to aid managers at every level in making decisions
about recurring situations or function.
2. Procedures – they are plans that describe the exact series of actions to be taken in a given
situation.
3. Rules – they are statements that either require or forbid a certain action.
Single-Use Plans. These plans are specifically developed to implement courses of action that are
relatively unique and are unlikely to be repeated.
Single-use plans may be further classified as follows:
1. budgets
2. programs, and
3. projects.
A budget, according to Weston and Brigham, is "a plan which sets forth the projected expenditure
for a certain activity and explains where the required funds will come from."
A program is a single-use plan designed to coordinate a large set of activities.
A project is a single-use plan that is usually more limited in scope than a program and is sometimes
prepared to support a program.
Parts of The Various Functional Area Plans
The engineer manager may be familiar with engineering plans, knowing the details from beginning
to end. However, the ever-present possibility of moving from one management level to the next and
from one functional area to another presses the engineer manager to be familiar as well with other
functional area plans.
The Contents of the Marketing Plan
The structure and content of marketing plans vary depending on the nature of the organizations
adapting them.
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Figure 3.4 Types of Plans
William Cohen maintains that the following

must be included in the marketing plan:
1. The Executive Summary - which

presents an overall view of the marketing
project and its potential
2. Table of Contents
3. Situational Analysis and Target Market
4. Marketing Objectives and Goals
5. Marketing Strategies
6. Marketing Tactics
7. Schedules and Budgets
8. Financial Data and Control
The Contents of the Production Plan
The production plan must contain the

following:
1. the amount of capacity the company

must have
2. how many employees are required
3. how much material must be purchased
The Contents of the Financial Plan
The components of the financial plan are as follows.
1. An analysis of the firm's current financial condition as indicated by an analysis of the most
recent statements
2. A sales forecast
3. The capital budgets
4. The cash budget
5. A set of pro forma (or projected) financial statements
6. The external financing plans
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Contents of the Human Resources Plan
The human resources plan must contain the following:
1. personnel requirements of the company

2. plans for recruitment and selection
3. training plan
4. retirement plan
Parts of The Strategic Plan
The strategic plan must contain the following:
1. Company or corporate mission

2. Objectives or goals
3. Strategies
Company of corporate mission refers to the "strategic statement that identifies why an
organization exists, its philosophy of management, and its purpose as distinguished from other similar
organizations in terms of products, services, and markets."
Making Planning Effective
Planning is done so that some desired results may be achieved. At times, however, failure in
planning occurs.
Planning may be made successful if the following are observed:
1. recognize the planning barriers

2. use of aids to planning
The planning barriers, according to Plunkett and Attner, are as follows:
1. manager's inability to plan

2. improper planning process
3. lack of commitment to the planning process
4. improper information
5. focusing on the present at the expense of the future
6. too much reliance on the planning department
7. concentrating on only the controllable variables
Among the aids to planning that may be used are:
1. Gather as much information as possible

2. Develop multiple sources of information
3. Involve others in the planning process
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Topic 3: Organizing Technical Activities
Reasons for Organizing
Organizing is undertaken to facilitate implementation of plans. In effective organizing, steps

are undertaken to breakdown the total job into more manageable man-size jobs. Doing these will make
it possible to assign particular tasks to particular persons. In turn, these will help facilitate the
assignment of authority, responsibility, and accountability for certain functions and tasks.
Organizing Defined
Organizing is a management function which refers to the structuring of resources and activities
to accomplish objectives in an efficient and effective manner.
The arrangement or relationship of positions within an organization is called the structure. The
result of the organizing process is the structure.
The Purpose of The Structure
The structure serves some very useful purposes. They are the following:
1. It defines the relationships between tasks and authority for individuals and departments.
2. It defines formal reporting relationships, the number of levels in the hierarchy of the
organization, and the span of control.
3. It defines the groupings of individuals into departments and departments into organization.
4. It defines the system to effect coordination of effort in both vertical (authority) and
horizontal
(tasks) directions.
When structuring an organization, the engineer manager must be concerned with the following:
1. Division of labor – determining the scope of work and how it is combined in a job.
2. Delegation of authority - the process of assigning various degrees of decision-making authority
to subordinates.
3. Departmentation – the grouping of related jobs, activities, or processes into major
organizational subunits.
4. Span of control – the number of people who report directly to a given manager.
5. Coordination — the linking of activities in the organization that serves to achieve a common
goal or objective.
Topic 4: The Formal Organization
After a plan is adapted, management will proceed to form an organization to carry out the
activities indicated in the plan.
The formal organization is the structure that details lines of responsibilities, authority, and
position. What is depicted in the organization chart is the formal organization. It is the planned
structure and it "represents the deliberate attempt to establish patterned relationships among
components that will meet the objectives effectively."
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The formal structure is described by management through:
1. organization chart
2. organizational manual and
3. policy manuals.
The organization chart is a diagram of the organization's official positions and formal lines of
authority.
The organizational manual provides written descriptions of authority relationships, details the
functions of major organizational units, and describes job procedures.
The policy manual describes personnel activities and company policies.
Informal Groups
Formal organizations require the formation of formal groups which will be assigned to perform
specific tasks aimed at achieving organizational objectives. The formal group is a part of the
organization structure.
There are instances when members of an organization spontaneously form a group with
friendship as a principal reason for belonging. This group is called an informal group. It is not a part of
the formal organization and it does not have a formal performance purpose.
Informal groups are oftentimes very useful in the accomplishment of major tasks, especially if
these tasks conform with the expectations of the members of the informal group.
The informal organization, useful as it is, is "vulnerable to expediency, manipulation, and
opportunism," according to Valentine. Its low visibility, Valentine added, makes it "difficult for
management to detect these perversions, and considerable harm can be done to the
company."
The engineer manager is, therefore, warned that he must be on the lookout for the possible
difficulties that the informal groups may do to the organization. It will be to his best interest if he could
make the informal groups work for the organization.
Types of Organizational Structures
Before the commencement of activities, the decision makers in an organization will have to
decide on what structure to adapt. Depending on the size and type of operations, a certain structural
type may best fit the requirements
Organizations may be classified into three types. They are the following:
1. Functional organization – this is a form of departmentalization in which everyone engaged in one

functional activity, such as engineering or marketing, is grouped into one unit.
2. Product or market organization – this refers to the organization of a company by divisions that brings
together all those involved with a certain type of product or customer.
3. Matrix organization - an organizational structure in which each employee reports to both a functional
or division manager and to a project or group manager.
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Figure 4.1 Reasons or Factors for Joining or Forming a Group
Figure 4.2 A Typical Functional Organization Chart of a Construction Company
Functional Organization
Functional organization structures are very effective in smaller firms, especially "single-
business firms where key activities revolve around well-defined skills and areas of specialization."
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Functional organizations have certain advantages. They are the following:
1. The grouping of employees who perform a common task permit economy of scale and
efficient resource use.
2. Since the chain of command converges at the top of the organization, decision-making is
centralized, providing a unified direction from the top.
3. Communication and coordination among employees within each department are excellent.
4. The structure promotes high-quality technical problem-solving.
5. The organization is provided with in depth skill specialization and development.
6. Employees are provided with career progress within functional departments.
The disadvantages of the functional organization are the following:
1. Communication and coordination between the departments are often poor.

2. Decisions involving more than one department pile up at the top management level and are often
delayed
3. Work specialization and division of labor, which are stressed in a functional organization,
produce routine, nonmotivating employee tasks.
4. It is difficult to identify which section or group is responsible for certain problems.
5. There is limited view of organizational goals by employees.
6. There is limited general management training for employees.
Product or Market Organization
The product or market organization, with its feature of operating by divisions, is "appropriate
for a large corporation with many product lines in several related industries."
The advantages of a product or market organization are as follows:
1. The organization is flexible and responsive to change.

2. The organization provides a high concern for customer's needs.
3. The organization provides excellent coordination across functional departments.
4. There is easy pinpointing of responsibility for product problems.
5. There is emphasis on overall product and division goals.
6. The opportunity for the development of general management skills is provided.
The disadvantages of the product or market organization are as follows:
1. There is a high possibility of duplication of resources across divisions.

2. There is less technical depth and specialization in divisions.
3. There is poor coordination across divisions
4. There is less top management control.
5. There is competition for corporate resources.
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Matrix Organization
A matrix organization, according to Thompson and Strickland, "is a structure with two (or
more) channels of command, two lines of budget authority, and two sources of performance and
reward." Higgins declared that "the matrix structure was designed to keep employees in a central pool
and to allocate them to various projects in the firm according to the length of time they were needed."
The matrix organization is afforded with the following advantages:
1. There is more efficient use of resources than the divisional structure.

2. There is flexibility and adaptability to changing environment
3. The development of both general and functional management skills are present.
4. There is interdisciplinary cooperation and any expertise is available to all divisions.
5. There are enlarged tasks for employees which motivate them better.
The matrix organization has some disadvantages, however. They are the following:
1. There is frustration and confusion from dual chain of command

2. There is high conflict between divisional and functional interests
3. There are many meetings and more discussion than action
4. There is a need for human relations training for key employees and managers.
5. There is a tendency for power dominance by one side of the matrix.
Types of Authority
The delegation of authority is a requisite for effective organizing. It consists of three types.
They are as follows:
1. Line authority - a manager's right to tell subordinates what to do and then see that they do it.
2. Staff authority - a staff specialist's right to give advice to a superior.
3. Functional authority - a specialist's right to oversee lower level personnel involved in that
specialty, regardless of where the personnel are in the organization.
Line departments perform tasks that reflect the organization's primary goal and mission. In a
construction firm, the department that negotiates and secures con- tracts for the firm is a line
department. The construction division is also a line function.
Staff departments include all those that provide specialized skills in support of line
departments. Examples of staff departments include those which perform strategic planning, labor
relations, research, accounting, and personnel.
Staff officers may be classified into the following:
1. Personal staff - those individuals assigned to a specific manager to provide needed staff services.
2. Specialized staff - those individuals providing needed staff services for the whole organization.
Functional authority is one given to a person or a work group to make decisions related to their
expertise even if these decisions concern other departments. This authority is given to most budget
officers of organizations, as well as other officers.
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The Purpose of Committees
When certain formal groups are deemed inappropriate to meet expectations, committees are
often times harnessed to achieve organizational goals. Many organizations, large or small, make use of
committees.
A committee is a formal group of persons formed for a specific purpose. For instance, the
product planning committee, as described by Millevo, is often staffed by top executives from
marketing, production, research, engineering, and finance, who work part-time to evaluate and approve
product ideas.
Committees are very useful most specially to engineering and manufacturing firms. When a
certain concern, like product development, is under consideration, a committee is usually formed to
provide the necessary line-up of expertise needed to achieve certain objectives.
Committees may be classified as follows:
1. Ad hoc committee – one created for a short-term purpose and have a limited life. An example is the
committee created to manage the anniversary festivities of a certain firm.
2. Standing committee – it is a relatively permanent committee that deals with issues on an ongoing
basis. An example is the grievance committee set up to handle initially complaints
from employees of the organization.
Committees may not work properly, however, if they are not correctly managed. Delaney
suggests that it might be useful to set up some procedures to make the committee
a more effective tool to accomplish our goals.
Summary:
Technical activities, like other activities, require effective planning, ie, if objectives and goals
are to be realized.
A plan is a methodological way of achieving results.
Planning is undertaken at various management levels.
Various steps are required in the planning process depending on the management level.
Plans may be classified in terms of functional areas, time horizon, and frequency of use.
Plans consist of various parts that the engineer manager must be familiar with.
Plans can be made effective by recognizing the planning barriers and making use of aids to
planning.
Reference:
C. Merle Crawford, New Products Management, Third Edition (Homewood, Illinois: Richard D. Irwin,
Inc., 1991)
Jay Heizer and Barry Render, Production and Operations Management (Boston: Allyn and Bacon,
1993)
James M. Higgins, The Management Challenge (New York: MacMillan Publishing Co., 1991)
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UNIVERSITY OF LA SALETTE,INC

COLLEGE OF ENGINEERING AND ARCHITECTURE

Module 2: Planning Technical Activities

2. What purpose do organizational structures serve?

An example of the difficulty of not having a plan is illustrated below.

Planning at Various Management Levels

Planning activities undertaken at various levels are as follows:

1. Top management level - strategic planning

Figure 3.1 Types of Planning

Figure 3.2 The Organization and Types of Planning Undertaken

The term operational planning refers to

Topic 2: The Planning Process

1. setting organizational, divisional, or unit goals

Setting Organizational, Divisional, or Unit Goals

Figure 3.3 Example of Goals by Organization Level

Developing Strategies or Tactics to Reach Goals

After determining the goals, the next task is

An example of a strategy is as follows:

The decision of a construction firm's

Determining Resources Needed

Functional Area Plans

Plans with Time Horizon

Plans with time horizon consist of the following:

Plans According to Frequency of Use

According to frequency of use, plans may be classified as:

1. standing plans and

Standing plans may be further classified as follows:

Single-use plans may be further classified as follows:

Parts of The Various Functional Area Plans

The Contents of the Marketing Plan

Figure 3.4 Types of Plans

William Cohen maintains that the following

1. The Executive Summary - which

The Contents of the Production Plan

The production plan must contain the

1. the amount of capacity the company

The Contents of the Financial Plan

The components of the financial plan are as follows.

Contents of the Human Resources Plan

The human resources plan must contain the following:

1. personnel requirements of the company

Parts of The Strategic Plan

The strategic plan must contain the following:

1. Company or corporate mission

Making Planning Effective

Planning may be made successful if the following are observed:

1. recognize the planning barriers

The planning barriers, according to Plunkett and Attner, are as follows:

1. manager's inability to plan

Among the aids to planning that may be used are:

1. Gather as much information as possible

Topic 3: Organizing Technical Activities

Reasons for Organizing

Organizing is undertaken to facilitate implementation of plans. In effective organizing, steps

The Purpose of The Structure

Topic 4: The Formal Organization

The formal structure is described by management through:

Types of Organizational Structures

1. Functional organization – this is a form of departmentalization in which everyone engaged in one

Figure 4.1 Reasons or Factors for Joining or Forming a Group

Figure 4.2 A Typical Functional Organization Chart of a Construction Company

Functional organizations have certain advantages. They are the following: