Planning

Technical
Activity
Alcover, Jasper Clint M.
BSCp.E - 5

If managing 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.

The Nature of Planning

Being busy can
affect decision-making,
so planning is undertaken

Plan
the output of planning
provides a methodical way of
achieving desired results
serves as a useful guide
(Without the plan, some minor tasks may 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. 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
in 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
According to Nickels :
Planning 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.]

According to Aldag and Stearns :

Planning refers to
the selection and 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 and the course of
action chosen is the means to 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 longrange goals and the course of action to achieve 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. determining 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
may 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 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 the lower management will adapt
their own tactics to implement 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 firms
management to diversify its business by
engaging also in the trading of
construction materials and supplies.
If 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.

Tactic
a short-term action taken by management
to adjust to negative internal or external
influences.
formulated and implemented in support
of the firms strategies.
Output : Tactical Plan
.

Example of Tactic

Hiring of contractual workers to

augment the companys current
workforce

3. Determining Resources Needed

Note 1:
When particular sets of strategies or
tactics have been 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 be
wasteful. Too little will mean loss of
opportunities for maximizing income.

Note 3:
To specify strategic requirements, a
general statement of needed resources
will suffice. The specific requirements will
be determined by 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 new 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. Marketing Plan
this is the written document or
blueprint for implementing and
controlling
an
organizations
marketing activities related to a
particular marketing strategy.

b. Production Plan
this a written document
that states that the quantity
of output a company must
produce in broad terms and
by product family.

c. Financial Plan
it is a document that
summarizes the current
financial situation of the
firm, analyzes the financial
needs, and recommends a
direction
for
financial
activities.

d. 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 companys 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 on 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 making
decisions about recurring situations
or function

a2. Procedures
they are plans that describe the
exact series of actions to be taken in
a given situation.
a3. Rules
they are statements 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 which 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 plan that is usually
more 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

The structure and 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. Marketing Objectives and Goals
5. Marketing Strategies
6. Marketing Tactics
7. Schedules and Budgets
8. Financial Data and Control

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

Contents of the Financial Plan

The financial plan must contain the following :

1.

2.
3.
4.
5.
6.

An analysis of the firms current financial

condition as indicated by an analysis of the
most recent statements
A sales forecast
The capital budget
The cast budget
A set of proforma (or projected) financial
statements
The external financing plan

Contents of the Human

Resources Plan
The human resources plan must contain
the following :
1. Personnel requirements of the
company
2. Plans for recruitment & selection
3. Training Plan
4. Retirement Plan

Parts of the Strategic Plan

1. Company or corporate mission
2. Objectives or goals
3. Strategies

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

Planning Barriers (According to

Plunkett & Attner)
1.
2.
3.
4.
5.
6.
7.

Managers 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 the controllable
variables

Aids on Planning that may be used

1. Gather as much information as
possible
2. Develop multiple sources of
information
3. Involve others in the planning
process

Questions ???