Engineering Management

PLANNING
 Module IV
PLANNING

• Explain the nature and purpose of planning

• Define the function of planning
• Identify the planning at various levels of management
• Identify the classifications and types of plans
• Identify the different planning tools
PLANNING
https://d3bxy9euw4e147.cloudfront.net/oscms-prodcms/media/documents/PrinciplesofManagement-OP_rU5O3X1.pdf
What is Planning?
The process of stating
objectives and then
determining the most
effective activities or
accomplishments
necessary to
reach/achieve stated
objectives

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 NATURE OF PLANNING

CONTRIBUTION TO PRIMACY AMONG EFFICIENCY OF

OBJECTIVES THE MANAGERS TASK PERVASIVENESS RESULTING PLANS

• Planning is goal • It involves choice • It is persuasive • It is a continuous

oriented • It is an integrated process
• It is a primary process • It includes effective
function and efficient
• It is a mental dimensions
activity
• It is forward
looking
• It is flexible

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LEVELS OF
MANAGEMENT

Refers to a line of
demarcation between
various managerial
positions

Determines a chain of
command, the amount of
authority and status
enjoyed by any managerial
position

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Top Level of Management
-board of directors, chief executive or managing
director.

Middle Level of Management

- branch managers and departmental managers
constitute middle level

Lower Level of Management

- also known as supervisory / operative level of
management. It consists of supervisors, foreman,
section officers, superintendent etc.
Strategic Plan (Top Management)
Strategic planning lays out the long-term, broad goals that a business or individual wants to achieve.
strategic plan provides the general idea of how to reach a goal.

Tactical Plan (Middle Management)

tactical plan outlines the short-term steps and actions that should be taken to achieve the goals described
in the strategic plan.

Operational Plan (Lower Management)

Operational Plan DOES present highly detailed information specifically to direct people to perform the
day-to-day tasks required in the running the organization.
 Setting Goals
-Provide a sense of direction
PLANNING PROCESS -Goals may be defined as “the precise statement of
results sought, quantified in time and magnitude, where
possible”

Developing Strategies/Tactics
-Ways to realize said goals
-Strategy may be defined as “a course of action aimed at
ensuring the organization will achieve its objectives”
-Tactic is a short-term action taken by the management to
adjust negative internal or external influences

Determining Resources Needed

-To satisfy strategic requirements, a general statement of
needed resources will suffice.

Setting Standards
-Standard may be defined as “a quantitative or
qualitative measuring device designed to help monitor
the performances of people, capital goods or process”.

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Types of Plans
• Functional Areas
• Time Horizon
• Frequency of Use
 Functional Area Plans
Marketing Plan Business document outlining your marketing strategy
and tactics.

Written document that states the quantity of output

Production Plan the company must produce while maximizing the
company’s resources.

It summarizes the current financial situation of the

Financial Plan firm, analyzes financial needs and recommends a
direction for financial activities.

It indicates the human resource needs of a company,

Human Resource Management Plan detailed in terms of quality and quantity and based on
the company’s strategic plans.
Contents of a Marketing Plan
1. Executive Summary

2. Table of Contents

3. Situational Analysis and Target Market

The structure and content of a
marketing plan vary depending on the 4. Marketing Objectives and Goals
organizations that are adapting them. 5. Marketing Strategies

6. Marketing Tactics

7. Schedules and Budgets

8. Financial Data and Control

Contents of a Production Plan

1. The amount of capacity a company must have

2. How many employees are required

3. How much material must be purchased

Contents of a Financial Plan

1. An analysis of the firm’s current financial

condition

2. Sales Forecast

3. Capital Budget

4. Cash Budget

5. A set of projected financial statements

6. The external financing plan

Contents of a Human Resources Plan

1. Personnel requirements of the company

2. Plans for recruitment and selection

3. Training plan

4. Retirement plan
Plans with Time Horizon
Short-Range Plans Plans which are intended to cover a period of less than
a year.

Plans which cover a time period of more than a year.

Long-Range Plans
Plans According to Frequency of Use
Standing Plans Plans which are used repeatedly.

Plans that are developed to implement courses of

Single-Use Plans action which are relatively unique and unlikely to be
repeated.
STANDING PLANS

1. Policies
– Broad guidelines to aid managers at every level in making decisions about recurring situations or function.

2. Procedures
– Plans that give the exact series of actions to be taken at a given situation.

3. Rules
– Statements that either require or forbid a certain action.
SINGLE-USE PLANS

1. Budgets
– A plan which sets forth projected expenditures for an activity and explains where the required funds will
come from.

2. Program
– Single-use plan designed to coordinate a large set of activities.

3. Project
– A plan which is usually more limited in scope than a program and is usually prepared to support a program.
PARTS OF THE STRATEGIC PLAN
1. Company or 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 market.

2. Objectives or Goals

3. Strategies
MARKETING
SWOT Analysis

PEST Analysis

Porter’s Five
Forces Model
SWOT Analysis
- SWOT analysis is a strategic planning technique that
provides assessment tools.

- The system combines information from the environmental

analysis and separates it into two components: internal
issues (strengths and weaknesses) and external issues
(opportunities and threats).
- Helps in identifying core competencies of the firm or company.

- It helps in building objectives for strategic planning.

- It provides information that helps in synchronizing the firm’s resources

and capabilities with the competitive environment in which the firm
operates.
- It may cause organizations to view circumstances as very simple because
of which the organizations might overlook certain key strategic contact
which may occur.

- Categorizing aspects as strengths, weaknesses, opportunities and threats

might be very subjective as there is great degree of uncertainty in market.
SWOT Analysis of McDonalds

Source: https://www.slideshare.net/Atul109/mcd-final-ppt
Assessment based from SWOT Analysis:
I. Market Development Strategies
- Explore new overseas market by intensive promotion.
- Constantly reinforce brand recognition by emotional attachment strategy.
Assessment based from SWOT Analysis:
II. Market Penetration Strategies
- Advertising and promotion collaboration with big brands such as Coca-Cola to attract more consumers.
- Setting prices according to different countries.
Assessment based from SWOT Analysis:
III. Product Development Strategies
- Switch to healthier product lines of coke (e.g. diet coke, minute maid)
- Change the menu in different countries and add some food with local flavor.
- Develop new product lines which focuses on organic and healthier food.
PEST Analysis
- This tool helps you understand the "big picture" forces of
change that your business or company is exposed to, and,
from this, take advantage of the opportunities that they
present.

- There will always be factors outside of your control affecting

how your business operates. One method for discovering
and quantifying those factors is the PEST analysis.
PEST Analysis
Political
- The Political aspect of PEST Analysis focuses on the
areas in which government policy and/or changes in
legislation affect the economy, the specific industry, and
the organization in question.
Social
- The Social factors that may be included in a PEST
Analysis are demographics and age distribution, cultural
attitudes, and workplace and lifestyle trends.
Economic
- The Economic portion of the analysis targets the key
factors of interest and exchange rates, economic growth,
supply and demand, inflation and recession.
Technological
- The Technological component considers the
specific role and development of technologies within the
sector and organization, as well as the wider uses, trends
and changes in technology. Government spending on
technological research may also be a point of interest in
this area.
- Helps to spot business opportunities and gives advanced warning of
significant threats.

- It reveals the direction of change within your business environment.

- It helps you avoid starting projects that are likely to fail, for reasons beyond
your control.
- External factors change over time and need constant attention and
reviewing.

- PEST analysis requires expertise and experience from the people involved in
the study plus extensive research and knowledge for the results to be
accurate.

- PEST analysis is based on assumptions and predictions because it is not

possible to collect all the necessary data and analyze it and make decisions
based on it.
 PEST Analysis of Airbus

Source: https://www.swotandpestle.com/airbus-se/
Porter’s Five Forces Model
- This model is a tool for analyzing competition for the
business. It is framed in a way to identify and analyze five
competitive forces.

- Used for understanding the competitiveness of the

business environment.
Porter’s Five Forces Model
1. Competition in the Industry - This force refers to the number of competitors and their ability to undercut a
company.

2. Threats of New Entrants - The less time and money it costs for a competitor to enter a company's market and
be an effective competitor, the more a company's position may be significantly weakened.

3. Power of Suppliers - This force addresses how easily suppliers can drive up the cost of inputs. It is affected by the
number of suppliers of key inputs of a good or service, how unique these inputs are, and how much it would cost a
company to switch from one supplier to another.

4. Power of Customers - This specifically deals with the ability that customers have to drive prices down.

5. Threat of Substitutes - Substitute goods or services that can be used in place of a company's products or
services pose a threat.
- It can be used to make decisions such as to enter a market ore not, how to
price a product, what are the important routes to market or supply
partnerships, and who are the future likely competitors.
- Five Forces model should be used at the broader level of an entire industry;
it is not designed to be used at a smaller group or market level.

- Porters model is inherently static, representing only aspects of the present

day.
 Porter’s Five Forces Model on Apple
Apple is in direct competition with companies such as Google, Inc., the Hewlett-
Competition
Packard Company, Samsung Electronics Co., Ltd. and Amazon, Inc. All of these
in the
companies expend significant capital on research and development (R&D) and
Industry marketing, just like Apple.

Power of The element of low switching cost referred to above strengthens the bargaining
Customers power of buyers as a key force for Apple to consider.

The threat of a new entrant to the marketplace that could seriously threaten Apple's
Threat of New market share is relatively low. This is primarily due to two factors: the extremely high
Entrants cost of establishing a company within the industry and the additional high cost of
establishing brand name recognition.

Source: https://www.investopedia.com/articles/investing/111015/analyzing-porters-five-forces-apple.asp
 Porter’s Five Forces Model on Apple

Power of The bargaining power of suppliers is a relatively weak force in the marketplace for
Suppliers Apple's products. The bargaining position of suppliers is weakened by the high number
of potential suppliers for Apple and the ample amount of supply.

Threat of This market force is relatively low for Apple due to the fact that most potential
Substitutes substitute products have limited capabilities compared to Apple's products.

Source: https://www.investopedia.com/articles/investing/111015/analyzing-porters-five-forces-apple.asp
Making Plans Effective
(Strategy Formulation)
Planning may be successful if the following are observed:

1. Recognize the PLANNING BARRIERS. The planning barriers, according to Plunkett and Attner are the following:
a. Manager’s inability to plan
b. Improper planning process
c. Lack of commitment to the planning process
d. Improper information
e. Focusing on the present at the expense of the future
f. Too much reliance on the planning department
g. Concentrating only on the controllable variables.

2. Use of aids to planning.

a. Gather as much information as possible
b. Develop multiple sources of information
c. Involve others in the planning process
 END.
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REFERENCES
• https://www.betterteam.com/
• https://www.cprime.com/
• https://www.americasjobexchange.com/engineering-manager-job-description
• https://devops.com/how-to-become-a-great-engineering-manager/
• https://onlinemasters.ohio.edu/blog/6-strengths-for-modern-engineering-managers/
• https://www.iedunote.com/
• https://ugcportal.com/raman-files/Developement-of-Management-Thoughts.pdf
• https://www.investopedia.com/
• https://www.business.com/articles/human-relations-management-theory-basics/
• https://www.yourarticlelibrary.com/organization/what-are-the-important-steps-involved-in-
staffing-process-5-steps/8677
• https://upraise.io/blog/types-performance-appraisal/
• Management by Stephen P. Robbins & Mary Coulter
• Publisher: 2010 Pearson Education
• https://www.slideshare.net/NardiinObada/ch-5-social-responsibility-and-managerial-ethics