Topic 3

Planning

Dr. Florante A. Magnaye, ASEAN Eng.

Professor
 Nature of Planning

A plan, which is the output of planning provides a

methodical way of achieving results. In the
implementation of activities, the plan serves as a
useful guide. Without a plan, some minor tasks
may be afforded major attention which may, later
on, hinder the accomplishment of objectives.
 Planning Defined
 Management function that involves anticipating
future trends and determining the best
strategies and tactics to achieve organizational
objectives ( Nickels, et.al.)
 Selection and sequential ordering of tasks
required to achieve an organizational goal.
(Aldag & Stearns)
 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. (Cole and
Hamilton).
 Planning at Various Management Levels

 Top management level – Strategic planning

 Middle management level – intermediate
planning
 Lower management planning – operational
planning
 Strategic Planning

 Process of determining the major goals of the

organization and the policies and strategies for
obtaining and using resources to achieve those
goals.
 In strategic planning, the whole company is
considered especially its objectives and
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

 Refers to the process of determining the

contributions that sub-units can make with
allocated resources. This is undertaken by
middle management.
 Under intermediate planning, the goals of the
subunits are determined and the plan is
prepared to provide a guide to the realization of
the goals. The intermediate plan is designed to
support the strategic plan.
 Operational Planning

 refers to the process of determining how

specific tasks can best be accomplished on time
with available resources.
 This is in support of the strategic plan and
intermediate plan.
 Planning Process

1. Setting the organizational, divisional, or unit

goals.
2. Developing strategies or tactics to reach those
goals
3. Determining resources needed
4. Setting standards
 Setting the 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 CEO), to
his division (if he heads a division), or to his unit (if
he is the supervisor). The setting of goals provides
an answer to the said concern. If everyone is aware
of the goals, everybody will contribute his share to
achieve the goals.
 Goals may be defined as a precise statement of
results sought, quantified in time and magnitude,
where possible.
Ex: to attain 25% return on investment, to increase the
number of projects undertaken, to increase the
numb er of project engineers.
 Developing strategies or tactics to reach those goals

The ways to reach the goals are called strategies and

these will be the concern of the top management. The
middle and lower management will adapt their own
tactics to implement their plans.
Strategy is defined as a course of action aimed at
ensuring that the organization will achieve its
objectives.
Tactic is a short-term action taken by management to
adjust to negative internal and external influences.
 Determining Resources Needed

When the particular sets of strategies or tactics have

been devised, the engineer manager will then determine
the human and non-human resources required by such
strategies or tactics.
To satisfy strategic requirements, a general statement of
the needed resources will suffice. The specific
requirements will be determined by the different units
of the company.
 Example

Suppose the management of the construction firm, has

decided, in addition to its current undertakings, to
engage in the trading of construction materials and
supplies. A general statement of the required
materials 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 50 million will be set aside to
finance the activity. Qualified personnel 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 must be made.
 A standard may be defined as a qualitative or
quantitative measuring device designed to help
monitor the performance 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 are:

• Marketing Plan – this is the written document or

blueprint for implementing and controlling an
organization’s marketing activities related to a
particular marketing strategy.

• Production Plan – a written document that states

the quantity of output the company must produce in
broad terms and by product family.
 Functional Area Plans

 Plans may be prepared according to the needs of the

different functional areas. Among the types are:

• Financial Plan – a document that summarizes the

current financial situation of the firm, analyzes
financial needs and recommends a direction for
financial activities.

• Human Resources Management Plan – a document

that indicates the human resource needs of the
company detailed in terms of quantity and quality
and based on the requirements of the company’s
strategic plan.
 Plans With Time Horizon

 Short-range Plans – plans intended to cover a period

of less than one year. First-line supervisors are
mostly concerned with these plans.

 Long-range plans – plans to cover a time span of

more than one year. These are mostly undertaken
by middle and top management.
 Plans According to Frequency of Use

 According to the frequency of use, plans may be

classified as:

• Standing plans

• 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:

• Policies – broad guidelines to aid managers at every

level of making decisions about recurring situations
or functions.
• Procedures – plans that describe the exact series of
actions to be taken in a given situation.
• 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. They are further classified
as follows:

• Budgets
• Program
• Projects
 Single-use Plans

 These plans are specifically developed to implement

courses of action that are relatively unique and are
unlikely to be repeated. They are further classified
as follows:

• Budgets – a plan that sets forth the expenditure for

certain activities and explains where the required
funds will come from.
• Program – designed to coordinate with a large set of
activities.
• Projects – usually more limited in scope than a
program and is sometimes prepared to support a
program.
 Making Planning Effective

 Planning may be made successful if the following

are observed:

• Recognize the planning barriers

• Use of aids to planning
 Planning Barriers

 Manager’s inability to plan

 Improper planning process
 Lack of commitment to the planning process
 Improper information
 Focusing on the present at the expense of the future
 Too much reliance on the planning department
 Concentrating on only controllable variables
 Aids to Planning

 Gather as much information as possible

 Develop multiple sources of information
 Involve others in the planning process
 Acknowledgment

Roberto Medina