MODULE 3 OVERVIEW

(ES 313 – Engineering

This module presents the nature of planning, its
Management)
significance as the first function of management. It will
define what is planning, present planning at various
PLANNING management levels, the planning process, types of plans
and how to make planning effective.

LEARNING OUTCOMES
Engr. Leo M. Sauro, D.M.
(+63)-9451136579 Students should be able to understand and apply
leomsauro@gmail.com the first function of management which is planning.

INTRODUCTION

There are many instances when managers are

overwhelmed by various activities which at times becloud
his judgment. This must be expected since anybody who
is confronted by several situations happening
simultaneously will loose sight of the more important
concerns. To minimize mistakes in decision-making,
planning is undertaken.

A plan, which is the output of planning, provides a

methodical way of achieving desired results. In the
implementation of activities, the plan serves as a useful
guide. Without the plan, some minor task may be
afforded major attention which may, later on, hinder the
accomplishment of objectives.

PLANNING DEFINED

Planning, according to Nickels and others, 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 what
could be decided now.

Ramon J. Aldag and Timothy 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.

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 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.”

For our purpose, it will suffice to define planning as

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

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 long-
range goals and the course of action to achieve these
goals.”

Intermediate Planning

Refers to “the process of determining 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 goals. The intermediate plan is designed
to support the strategic plan.

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 Under intermediate planning, the goals of a sub-unit 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.

Operational planning

The term operational planning refers to “the

process of determining how specific tasks can best be
accomplished on time with available resources.” This type
of planning is a responsibility of lower management. It
must be performed in support of the strategic plan and
the intermediate plan.

Figure 3.1 Types of Planning

CEO, President,
Vice Presidents,
General
Top Management Manager, Strategic Planning
Division Heads (1 to 10 years)

Functional
Middle Management Managers, Product Intermediate Planning
Line Managers,
(6 months to 2 years)
Department Heads

Lower Operational
Unit Managers, First Line
Management Planning
Supervisors
(1 week to 1 year)

THE PLANNING PROCESS

The process of planning consists of various steps

depending on the management level that performs the
planning task. Generally, however, planning involves the
following:

1. Setting organizational, divisional, or unit goals

2. Developing strategies or tactics to reach those
goals
3. Determining resources needed and
4. Setting standards

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 Setting Organizational, Divisional, or Unit Goals

The first task of the engineer manager is to provide

a sense of direction of his firm (if he is the chief
executive), to his division (if he heads a division), or to his
unit (if he is supervisor). The setting of goals provide an
answer to the said concern. If everybody in the firm is
aware of the goals, there is big chance that everybody
will contribute his 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.”

Examples of Goals, by Organizational Level

ORGANIZATIONAL LEVEL EXAMPLE OF GOAL

Company: Buenavista to attain a return of

Construction Corp. investment of 25%

Division: Project to increase the number

Management Division of projects undertaken
By the company

Unit: Personnel Services to increase the number

Unit of project engineers

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 lower
management will adapt their own tactics to implement
their plans.

A strategy may be defined as a “course of action

aimed at ensuring that the organization will achieve its
objectives.”

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 An example of a strategy is as follows:

The decision of a construction firm’s

management to diversify its business by engaging
also in the trading of construction materials and
supplies.

When the above mentioned strategy is

implemented, it may help the construction firm realize
substantial savings in the materials and supply
requirements used in their construction activities. 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.

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 resources requirements
are currently available, they must be specified.

The quality and 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.

To satisfy strategic requirements, a general

statement of needed resources will suffice. The specific
requirements will be determined by the different units of
the company.

To illustrate:

Suppose the management of a construction firm

has decided, in addition to its current undertakings, to
engage in the trading of construction materials and
supplies.

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 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 P50 million shall be set aside to
finance the activity. Qualified persons 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 may
be made or reinforcements given.

A standard may be defined as a “quantitative or

qualitative measuring device designed to help to help
monitor the performances 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 of
functional 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 a written document that
states the quantity of output a company must
produce in broad terms and by product family.

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 3. Financial Plan – it is document that summarizes
the current financial situation of the firm, analyze
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 covering 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 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.

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 statement that either require
or forbid a certain action.

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 Single-Use Plans. These plans are specifically
developed to implement courses of action that are
relatively unique and are likely to be repeated.

Single-use plans may be further classified as follows:

1. Budgets
2. Programs, and
3. Projects.

A budget, according to Weston and Brigham, is

plan which sets forth the projected expenditure for a
certain activity and explains where the required funds will
come from.

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.

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

The planning barriers, according to Plunkett and

Attmer, are as follows:

1. 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

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 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.

STUDENT ACTIVITY

1. Interview (through on line, “NO FACE TO FACE”)

the general manager of a construction firm in your
locality.
Inquire about the planning activities
undertaken by the firm.
Prepare a report about the result of the
interview.

Note: (Pls indicate on your answer sheets your Name, Subject,

Module #, Activity #, type of exam , etc.)

Use A4 size bond paper for your answer sheets. Submit your Student
Activity/Assessment (hardcopy and handwritten) to
* thru the UEP municipal link or university main link
* any mode that will be deemed safe for you and me, on or before
Sept 23, 2021.

FEEDBACK

Now you know my dear student that if managing

an 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.

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 SUMMARY

Technical activities, like other activities, require

effective planning, i.e., if objectives and goals are to be
realized.

A plan is a methodical way of achieving results.

Planning is undertaken at various management

levels.

Various steps are required in the planning process

depending on the management level.

P0lans may be classified in terms of functional

areas, time horizon, and frequency of use.

Plans consist of various parts that the engineer

manager must be familiar with.

Plans can be made effective by recognizing the

planning barriers and making use of aids to planning.

REFERENCES

Medina, Roberto G.(2004). Engineering Management.

REX Book Store.

Baltazar, Jose D. et.al. (2012) Management in the

Philippine Setting. National Book Store.

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