Liwag, Ernest Lance Nixon R.

2019-01861
Engineering Management
Assignment 2

CHAPTER 3

1. Why is planning an important activity for engineer managers?

Planning is important for the engineer managers as it is an aspect that they
will have to consider because engineer managers who apply this process meet the
opportunity to be able to evaluate situations which result into an effective decision-
making. The management level of an engineer manager does not matter because
they will have to spend a bit of their time to planning.
2. How may "planning" be defined?

Different experts provide definitions of planning in various ways, all of

which are designed to fit certain purposes. According to Nickels and others,
planning refers to the management function that deals with anticipating future trends
and identifying best strategies and tactics to achieve organizational objectives."'
This definition is useful because it relates the future to what could be decided now.
Aldag and Stearns, on the other hand, define planning as "the selection and
sequential ordering of tasks required to achieve an organizational goal. This
definition centers on the activity required to accomplish the goals. The definition of
Cole and Hamilton provides a better guide on how to effectively perform this vital
activity. Planning, according to them is "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.'"

3. What planning activities are undertaken at various management levels?

Planning activities undertaken at various levels are as follows: Top

management level—strategic planning, middle management level — intermediate
planning, and lower management level — operational planning. The term strategic
planning refers to the process of ascertaining the major goals of the organization
and the policies and strategies for getting and using resources to achieve those
goals.' The top management of any company is engaged 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 ph4n which spells out the
decision about long-range goals and the course of action to achieve these goals."'
Intermediate Planning Intermediate planning `refers to "the process of deter-mining
the contributions that subunits can make with allocated resources.' This type of
planning is undertaken by middle management. Under intermediate planning, the
goals of a subunit are determined, and a plan is prepared to provide a guide to the
realization of the goals. The intermediate plan is designed to support the strategic
plan.

4. What are the steps in the planning process?

Setting Organizational, Divisional, or Unit Goals

The primary responsibility of the engineer manager is to convey a feeling of
direction to his firm (if he is the chief executive), to his division (if he heads a
division), or to his unit (if he is a supervisor). The process of defining goals offers a
solution to the problem. Everyone in the company (or division or unit, as the case
may be) will likely do their fair share to achieving the goals if they are all aware of
them. The phrase "specific declaration of results sought, measured in time and scale,
where possible," can be used to describe goals.

Developing Strategies or Tactics to Reach Objectives After deciding on your

goals, the following step is to come up with a plan of action to achieve them were
to carry out their plans, the middle and lower management will modify their own
strategies. A strategy is described as "a sequence of action aimed at assuring that the
organization will achieve its objectives." One example of a strategy is the
management's choice to diversify the company's revenue streams by getting
involved in the selling of construction supplies and materials. The construction
company may gain significant savings in the material and supply requirements used
in their construction activities when the aforementioned technique is put into
practice. The firm will also have greater control 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.
 The engineer manager will next decide what human and nonhuman resources are
needed for such strategies or tactics after they have been developed. Even if the
resource requirements are now available, they must be mentioned. It is crucial to
accurately estimate the kind and amount of resources required. Too much resources
in terms of either quality or quantity will be wasteful. A deficit will result in missed
chances to increase earnings. To achieve strategic needs, a general state-ment of
needed resources will suffice. The various business units will decide on the specific
requirements. To give an example: Assume the management of a building company
has decided to trade construction supplies and materials in addition to its current
endeavors. The following is a general description of the resources that will be
needed: A new business unit will be established to handle the purchasing and selling
of construction supplies and materials. To finance the activities, P50 million shall
be set aside. Competent personnel shall be sought 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 may be made or reinforcements given." A standard may
be defined as "a quantitative or qualitative measuring device designed to help
monitor the performances of people, capital goods, or processes."'2. 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.

5. What are the types of plans? How may they be classified?

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 of functional area plans are the following: 1, Marketing
plan— this is the written document or blueprint for implementing and controlling
an organization's marketing activities related to a particular marketing strategy." 2.
Production plan — this is a written document that states the quantity of output a
company must produce in broad terms and by product family." 3. Financial plan —
it is a document that summarizes the current financial situation of the firm, analyzes
financial needs, and recommends a direction for financial activities. 4. 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 company's strategic plan.
 Plans With Time Horizon Plans with time horizon consist of the following:
1. Short-range plans — these are plans intended to cover a period of less than one
year. First-line supervisors are mostly concerned with these plans. 2. Long-range
plans — these are plans to cover a time span of more than one year. These are mostly
undertaken by middle and top manag-ment.

Plans According to Frequency of Use

According to frequency of use, plans may be classified as: 1. standing plans
and 2. single-use plans. Standing Plans. These are plans that are used again and
again, and they focus on managerial situations that recur repeatedly.th Standing
plans may be further classified as follows: 1. Policies — they are broad guidelines
to aid managers at every level in making decisions about recurring situations or
function 2. Procedures — they are plans that describe the exact series of actions to
be taken in a given situation.'" 3. Rules — they are statements that either require or
forbid a certain action.

6. What is a production plan? What are its components?

Production planning creates an efficient process for production according to

customer and organizational needs. It optimizes both customer-dependent processes
-- such as on-time delivery -- and customer-independent processes, such as
production cycle time.

A good production plan minimizes lead time, which is the amount of time
that passes between the placing of an order and the completion and delivery of that
order. Depending on the company and the type of production planning necessary,
the definition of lead time varies slightly.

7. What is a budget?

A budget is a plan of action for a future period. Managerial actions that follow
their decisions with regard to the aspects of business are based on a budget. The
budget pertaining to any of the activities of business is always forward- looking. It
is prepared prior to a defined period.

The CIMA Official Terminology defines a budget as “A quantitative

statement, for a defined period time, which may include planned revenues,
expenses, assets, liabilities and cash flows.” A budget is thus, a plan quantified in
monetary terms. It is prepared for a defined period of time.
 The Chartered Institute of Management Accountants (CIMA), London
defines budget as:”A plan expressed in money. It is prepared and approved prior to
the budget period and may show income, expenditure and the capital employed.
May be drawn up showing incremental effects on former budgeted and actual
figures, or be compiled by zero-based budgeting”

8. What is meant by "company mission"?

The mission describes the purpose of the company – that is to say, explaining
why the company exists and what positive contribution it can make to customers
and society. A mission should be defined as broadly as possible, in order to not limit
the company’s future possibilities.

9. What are the barriers to planning?

The planning barriers, according to Plunkett and Attner, are as follow1.

manager's inability to 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.

10. What may be used as aids in planning?

Among the aids to planning that may be used are gather as much information
as possible, develop multiple sources of information, and involve others in the
planning process.

REFERENCE:
Medina, R.G. Engineering Management. Rex Book Store. pp. 2 to 37