Planning

Technical
Activity
 If managing organization is to be
pursued vigorously , planning will
constitute the most important
activity . Managers who plan are
a ff o r d e d w i t h the o p p o r t u n i t y to
carefully analyze situations which
directly contribute to effective
decision-making.
 If managing organization is to be
pursued vigorously , planning will
constitute the most important
activity . Managers who plan are
a ff o r d e d w i t h the o p p o r t u n i t y to
carefully analyze situations which
directly contribute to effective
decision-making.
T h e engineer manager, regardless of
his management level, will have to
devote some of his time to planning .

“ Th e h i g h e r t h e m a n a g e m e n t l e v e l
th e e n g i n e e r m a n a g e r is in, the
m o r e s o ph i s t i c a t e d h i s p l a n n i n g
activity becomes.“
The Nature of Planning

“Being busy can

affect decision-making,
so planning is undertaken”
Plan
- theoutput of planning
- provides a methodical way of
achieving desired results
serves as a useful guide
(Without the plan, some minor tasks m a y be
afforded major attention which may, later on,
hinder the accomplishments of objectives)
An example of the difficulty of not
having a PLAN
The management of an engineering firm was
able to identify the need to hire additional 3
employees. The manager proceeded to invite
applicants, screen them, and finally hired
three of them. W h e n the hiring expense
report w a s analyzed, it involved m o r e than
d o u b l e the a m o u n t s p e n t b y other fi rms in
hiring the same number of people.
When an inquiry was made, it was found out
that the manager committed s o m e errors
i n j u d g m e n t . F o r i n s t an ce, h e u s e d a n
expensive advertising layout in a newspaper
when a simple message will do.

Also, it w a s found out that the absence of a

hiring plan contributed to the high cost
of hiring.
Planning Defined
According to Nickels :
Planning refers to
“ the m a n a g e m e n t f u n c t i o n that i n v o l v e s
anticipating fu tu re tren d s a n d d e t e r m i n i n g
the best strategies a n d tactics to achieve
organizational objectives.”

[ This definition is useful because it relates

the future to what could be decided now. ]
According to Aldag and Stearns :
Planning refers to
“the selection a n d sequential ordering
of tasks required to achieve an organizational
goal.”

[ This definition centers on the activity

required to accomplish the goals ]
Definition Summary :
Planning
selecting the best course of action so
that the desired result may be achieved.
It must be stressed that the desired
result takes priority a n d the c o u r s e of
a c t i o n c h o s e n is t h e m e a n s t o realize
the goal.
PLANNING AT VARIOUS MANAGEMENT LEVELS
Types of Planning
STRATEGIC PLANNING
process of determining the major goals of the
organizational and the policies and strategies for
obtaining and using resources to achieve this
goal.
the whole company is considered, specifically its
objectives and current resources.
Involved : Top Management
Output : Strategic Plan ( the decision about long-
r a n g e g o a l s a n d t h e c o u r s e o f a c t i o n t o a c h i e v e this
goals” )
INTERMEDIATE PLANNING
process of determining the contributions that
subunits can make with allocated resources.
the goals of a subunit are determined and a plan
is prepared to provide a guide to realization of
the goals.
Involved : Middle Management
Output : Intermediate Plan
( designed to support the strategic plan )
OPERATIONAL PLANNING
The process of determining how specific task
can best be accomplished on time with available
resources.
Involved : Lower Management
Output : Operational Plan
( designed to support the strategic plan &
the intermediate plan )
Planning Process
consist of various steps depending on the
management level that performs the planning
task
1. setting organizational, divisional, or unit
goals
2. developing strategies or tactics to reach
those goals
3. determ ining resources needed
4. setting standards
1. Setting Organizational, Divisional,
or Unit goals
The 1st task of the manager is to provide a sense of
direction to his firm (if he is the chief executive),
to his division (if division chief) , or to his unit (if 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/her
share in the realization of such goals.
Goals
m a y be defined as the “precise
statement of results sought,
quantified in time and magnitude,
where possible.”
Example of Goals
2. Developing Strategies or Tactics
to Reach Goals
After determining the goals, the next
task is to devise s o m e m e a n s to realize
them. T h e w a y s to realize the goals are
called strategies a n d these will b e the
concern of top management. The middle
and the lower management will adapt
their o w n tactics to i m p l e m e n t their
plans.
Strategy
may be defined as the “course of
action aimed at ensuring that the
organization will achieve its
objectives.”
Example of Strategy
The decision of a construction firm’s
m a n a g e m e n t to diversify its business b y
engaging also in the trading of
construction materials and supplies.

If strategy is i m p l e m e n t e d , it m a y h e l p the
construction firm realize substantial savings in
the material a n d supply requirements u s e d in
their construction activities. The firm will also
have greater control in the timing of deliveries
f il d li
 Tactic
a short-term action taken by management
to adjust to negative internal or external
influences.
formulated and implemented in support
of the firm’s strategies.
Output : Tactical Plan
.
Example of Tactic

Hiring of contractual workers to

augment the company’s current
workforce
3. Determining Resources Needed

Note 1:
When particular sets of strategies or
tactics h a v e b e e n devised, the engineer
manager will, then, determine the human
and nonhuman resources require by such
strategies or tactics. Even if the resource
requirements are currently available, they
must be specified.
Note 2:
The quality and the quantity of
resources needed must be correctly
determined. Too much resources in terms
of either quality or quantity will b e
wasteful. Too little will mean loss of
opportunities for maximizing income.
Note 3:
To specify strategic requirements, a
g e n er al s t a t e me n t o f n e e d e d r e s o u r c e s
will suffice. The specific requirements will
b e d e t ermined b y the different units of
the company.
Example :
Suppose the management of a construction firm has
decided, in addition to its current undertakings, to
engage in the trading of constructions materials and
supplies.

A general statement of required resources will be as

follows: A n e w business unit will be organized to
deal with the buying and selling of construction
materials and supplies. The amount of Php 50
million shall be set aside to finance the activity.
Qualified persons shall be recruited for the purpose.
4. Setting Standards

The standards for measuring

performance will be set at the
planning stage. When actual
performance does not match with the
planned performance, corrections
may be made or reinforcements.
Standard
a quantitative or qualitative
measuring device designed to help
monitor the performances of people,
capital goods, or processes.
 Types of Plans
Plans are different types
may be classified in terms of :
1. functional areas
2. time horizon and
3. frequency of use
1. Functional Area Plans

Plans may be prepared according to

the needs of the different functional
areas.
Types :
a. Marketing Plan
b. Production Plan
c. Financial Plan
a. M arketing Plan
this is t h e w r i t t e n d o c u m e n t o r
blueprint for implementing and
controlling an organization’s
marketing activities related to a
particular marketing strategy.
b. Production Plan
this a written document
that states that the quantity
of output a c o m p a n y m u s t
produce in broad terms and
by product family.
c. Financial Plan
it is a d o c u m e n t t h a t
summarizes the current
financial situation of the
firm, analyzes the financial
needs, a n d r e c o m m e n d s a
direction for financial
activities.
d. Huma n R esource M a nagement Plan

it is a document that indicates the human

resource needs of a company detailed in
terms of quantity and quality and based o n
the requirements of the company’s strategic
plan.
2. Time Horizon Plans

consist of the following:

a. Short-Range Plans
b. Long-Range Plans
a. Short-range plans
these are plans intended to cover a
period of less than one year.
Involved : First-line supervisors

b. Long-range plans
these are plans covering a time span
of more than one year.
Involved : middle and top
management
4. Plans According to
Frequency Use

may be classified as :
a. Standing Plans
b. Single-Use Plans
a. Standing Plans

plans that are used again and

again, and they focus o n managerial
situations that recur repeatedly.
may be classified as :
a1. Policies
a2. Procedures
a3. Rules
a1. Policies
they are broad guidelines to aid
managers at every level in m a k i n g
decisions about recurring situations
or function
a2. Procedures
th ey are plans that describe the
exact series of actions to be taken in
a given situation.

a3. Rules
t h e y a r e stat e m e n t s that either
require or forbid a certain action.
b. Single-Use Plans

may be classified as :
b1. budgets
b2. programs
b3. projects
b1. Budget
according to Weston and Brigham , is
“a plan w h i c h sets forth the
projected expenditure for a certain
activity and explains where the
required funds will come from. ”
b2. Program
is a single-use plan use designed to
coordinate a large set of activities.

b3. Project
is a single -use p l a n that is usually
mo re limited in scope than a
program and is sometimes prepared
to support a program.
PARTS/CONTENTS OF THE
VARIOUS FUNCTIONAL
AREA PLANS
Contents of the Marketing Plan

T h e structure a n d content of
marketing plans vary depending on
the nature of the organizations
adapting them. 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. M arketing Objectives and Goals
5. M arketing Strategies
6. Marketing Tactics
7. Schedules and Budgets
8. Financial Data and Control
 Contents of the Production Plan
T h e production plan must contain the
following :

1 . th e am o u nt of capacity th e
company must have
2. how m any e m ployees are required
3 . h o w m uch m aterial m ust be
purchased
 Contents of the Financial Plan
The financial plan must contain the following :

1. A n analysis of the firm’s current financial

condition as indicated b y an analysis of the
most recent statements
2. A sales forecast
3. The capital budget
4. The cast budget
5. A set of proform a (or projected) financial
statemen ts
6. The external financing plan
 Contents of the Human
Resources Plan
The human resources plan must contain
the following :

1 . P e rso n n e l re q u ire m e n ts o f th e
company
2. Plans for recruitment & selection
3. Training Plan
4. R etirem ent Plan
Parts of the Strategic Plan

1. Com pany or corporate m ission

2. Objectives or goals
3. Strategies
Making Planning
Effective
Planning is d o n e so that s o m e
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
 Planning Barriers (According to
Plunkett & Attner)
1. Manager ’s inability to plan
2. Im proper planning process
3. Lack of commitment to the planning process
4. Im proper inform ation
5. F o c u s in g o n the p r e s e n t a t the e x p e n s e o f
the future
6. Too m uch reliance on th e planning
department
7. C o ncentrating on only the controllable
variables
Aids on Planning that may be used

1. G ather as m uch inform ation as

possible
2. D evelop m ultiple sources of
information
3. Invo lve o th ers in the p lann ing
process