FA2 An example of the difficulty of not having a plan is

Answer the following in a short bond paper and illustrated below.

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The management of an engineering firm was
1. How may "planning" be defined?
able to identify the need to hire additional three
2. Why is planning an important activity for
employees. The manager proceeded to invite
engineer managers?
applicants, screen them, and finally hired three of
3. What planning activities are undertaken at
them. When the hiring expense report was
various management levels?
analyzed, it involved more than double the amount
4. How are the planning activities of these
spent by other firms in hiring the same number of
levels connected with each other?
people.
5. Give three planning barriers and
describe/explain how these affect the When an inquiry was made, it was found out that
effectiveness of a plan. the manager committed some errors of judgment.
For instance, he used an expensive advertising
If managing an organization is to be pursued
layout in a newspaper when a simple message
vigorously, planning will constitute the most
will do.
important activity. Managers who plan are afforded
with the opportunity to carefully analyze situations Also, it was found out that the absence of a hiring
which directly contribute to effective plan contributed to the high cost of hiring.
decision-making.
Planning Defined
The engineer manager, regardless of his
management level, will have to devote some of his Various experts define planning in various ways, all
time to planning. The higher the management of which are designed to suit specific purposes.
level the engineer manager is in, the more
sophisticated his planning activity becomes. Why Planning, according to Nickels and others, refers to
and how this is so shall be discussed in this "the management function that involves
Module. anticipating future trends and determining the best
strategies and tactics to achieve organizational
Nature of Planning objectives." This definition is useful because it
relates the future to what could be decided now.
There are many instances when managers are
overwhelmed by various activities which at times Aldag and Stearns, on the other hand, define
becloud his judgment. This must be expected planning as "the selection and sequential ordering
since anybody who is confronted by several of tasks required to achieve an organizational goal."
situations happening simultaneously will loose This definition centers on the activity required to
sight of the more important concerns. To accomplish the goals.
minimize mistakes in decision-making, planning is
The definition of Cole and Hamilton provides a
undertaken.
better guide on how to effectively perform this
A plan, which is the output of planning, provides a vital activity. Planning, according to them, is
methodical way of achieving desired results. In the "deciding what will be done, who will do it, where,
implementation of activities, the plan serves as a when and how it will be done, and the standards to
useful guide. Without the plan, some minor tasks which it will be done.
may be afforded major attention which may later
For our purpose, it will suffice to define planning as
on, hinder the accomplishment of objectives,
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.

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 Operational Planning
long-range goals and the course of action to
The term operational planning refers to "the
achieve these goals."
process of determining how specific tasks can
Intermediate Planning best be accomplished on time with available
resources". This type of planning is a responsibility
Intermediate planning refers to "the process of
of lower management. It must be performed in
determining the contributions that subunits can
support of the strategic plan and the intermediate
make with allocated resources." This type of
plan.
planning is undertaken by middle management.
The Planning Process
Under intermediate planning, the goals of a
subunit are determined and a plan is prepared to
The process of planning consists of various steps
provide a guide to the realization of the goals. The
depending on the management level that performs
intermediate plan is designed to support the
the planning task. Generally, however, planning
strategic plan.
involves the following:
 1. setting organizational, divisional, or unit After determining the goals, the next task is to
goals devise some means to realize them. The ways to
2. developing strategies or tactics to realize the goals are called strategies and these will
reach those goals be the concern of top management. The middle
3. determining resources needed and and lower management will adapt their own
4. setting standards. tactics to implement their plans.

Setting Organizational, Divisional, or Unit Goals A strategy may be defined as "a course of action
aimed at ensuring that the organization will
The first task of the engineer manager is to provide achieve its objectives."
a sense of direction to his firm (if he is the chief
executive), to his division (if he heads a division), An example of a strategy is as follows:
or to his unit (if he is a supervisor). The setting of
The decision of a construction firm's
goals provide an answer to the said concern. If
management to diversify its business by engaging
everybody in the firm (or division or unit, as the
also in the trading of construction materials and
case maybe) is aware of the goals, there is a big
supplies.
chance that everybody will contribute his share in
the realization of such goals. -when the above mentioned strategy is
implemented, it may help the construction firm
Goals may be defined as the "precise statement
realize substantial savings in the material and
of, results sought, quantified in time and
supply requirements used in their construction
magnitude, where possible." Examples of goals are
activities. The firm will also have greater control
provided in Figure 3.3.
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 heeded must

be correctly determined. Too much resources in
Developing Strategies or Tactics to Reach Goals terms of either quality or quantity will be wasteful.
Too little will mean loss of opportunities for 1. Marketing plan - this is the written
maximizing income. document or blueprint for implementing and
controlling an organization's marketing
To satisfy strategic requirements, a general
activities related to a particular marketing
statement of needed resources will suffice. The
strategy.
specific requirements will be determined by the
2. Production plan - this is a written
different units of the company.
document that states the quantity of output
To illustrate: a company must produce in broad terms
and by product family.
Suppose the management of a construction firm 3. Financial plan - it is a document that
has decided, in addition to its current undertakings, summarizes the current financial situation
to engage in the trading of construction materials of the firm, analyzes financial needs, and
and supplies. recommends a direction for financial
activities.
A general statement of required resources will be
4. Human resource management plan - it
as follows: A new business unit will be organized
is a document that indicates the human
to deal with the buying and selling of
resource needs of a company detailed in
construction materials and supplies. The amount
terms of quantity and quality and based on
of Php50 million shall be set aside to finance the
the requirements of the company's
activity. Qualified persons shall be recruited for
strategic plan.
the purpose.

Setting Standards Plans With Time Horizon

Plans with time horizon consist of the following:
The standards for measuring performance may be
1. Short-range plans - these are plans
set at the planning stage. When actual
intended to cover a period of less than one
performance does not match with the planned
year. First-line supervisors are mostly
performance, corrections may be made or
concerned with these plans.
reinforcements given. ·
2. Long-range plans - these are plans
A standard may be defined as "a quantitative or covering a time span of more than one
qualitative measuring device designed to help year. These are mostly undertaken by
monitor the performances of people, capital middle and top management.
goods, or processes."
Plans According to Frequency of Use
An example of a standard is the minimum number According to frequency of use, plans may be
of units that must be produced by a worker per classified as:
day in a given work situation. ·
1. standing plans and
Types of Plans 2. single-use plans.
Plans are of different types. They may be
classified in terms of functional areas, time Standing Plans. These are plans that are used
horizon, and frequency of use. again and again, and they focus on managerial
situations that recur repeatedly.
Functional Area-Plans Standing plans may be further classified as
Plans may be prepared according to the needs of follows;
the different functional areas. Among the types of 1. Policies - they are broad guidelines
functional area plans are the following: to aid managers at every level in
·
 making decisions about recurring PARTS OF THE VARIOUS FUNCTIONAL AREA
situations or function. PLANS
2. Procedures - they are plans that The engineer manager may be familiar with
describe the exact series of actions engineering plans, knowing the details from
to be taken in a given situation. beginning to end. However, the ever-present
3. Rules - they are statements that possibility of moving from one management level
either require or forbid a certain to the next and from one functional area to
action. another presses the engineer manager to be
Single-Use Plans. These plans are specifically familiar as well with other functional area plans.
developed to implement courses of action that are
relatively unique and are unlikely to be repeated. The Contents of the Marketing Plan
Single-use plans may be further classified as The structure and content of marketing plans vary
follows: depending on the nature of the organizations
1. budgets adapting them. William Cohen maintains that the
2. programs, and following must be included in the marketing
3. projects. plan.
A budget, according to Weston and Brigham, is "a 1. The Executive Summary - which presents
plan which sets forth the projected expenditure for an overall view of the marketing project
a certain activity and explains where the required and its potential.
funds will come from." 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 capacity a company must have
2. how many employees are required
3. how much material must be purchased

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.
The Contents of the Financial Plan Making Planning Effective
The components of the financial plan are as Planning is done so that some desired results
follows. may be achieved. At times, however, failure in
1. An analysis of the firm's current financial planning occurs.
condition as indicated by an analysis of Planning may be made successful if the
the most recent statements following are observed; ·
2. A sales forecast 1. recognize the planning barriers
3. The capital budget 2. use of aids to planning
4. The cash budget The planning barriers, according to Plunkett and
5. A set of pro forma (or projected) financial Attner, are as follows:
statements 1. manager's inability to plan
6. The external financing 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

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 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 markets."