PLAN

-Provides a methodical way of achieving desired results and it is a useful guide.

PLANNING
-Selecting the best course of action so that the desired results may be achieved.
The management function that involves anticipating future trends and determining the best
strategies and tactics to achieve organizational objectives.
- NICKELS
The selection and sequential ordering of tasks required to achieve an organizational goal.
- ALDAG AND 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
THE NATURE OF PLANNING
A plan provides a methodical way of achieving desired results and it is a useful guide but if you
don't plan, it can hinder the accomplishment of objectives.
Planning is selecting the best course of action so that the desired results may be achieved.
According to Koontz and ODonnell, there are four basic principles to be dealt with in
understanding the nature of planning:

Primacy of Planning: This deals with the importance of planning for its central role in
linking all the other managerial functions.

Pervasiveness of Planning: This brings out the ideas that planning is a function and
responsibility of every manager, supervisor, and foreman in an organization.

Contribution to Objectives: Plans are means to achieve some ends and without
planning, we cannot achieve goals and objectives of an organization.

Efficiency of Planning: Least costly and more beneficial.

PLANNING AT VARIOUS MANAGEMENT LEVELS

Planning activities undertaken at various levels are as follows:

TOP MANAGEMENT LEVEL (STRATEGIC PLANNING)

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

MIDDLE MANAGEMENT LEVEL (INTERMEDIATE PLANNING)

-The process of determining the contributions that subunits can make with allocated
resources.

LOWER MANAGEMENT LEVEL (OPERATIONAL PLANNING)

-The process of determining how specific tasks can best be accomplished on time with
available resources.

MANGEMENT LEVELS

TOP MANAGEMENT

PLANNING HORIZONS

Chief Executive Officer

President
Vice Presidents
General Manager
Division Heads

STRATEGIC PLANNING
(one to ten years)

MIDDLE MANAGEMENT

Functional Managers
Product Line Managers
Department Heads

INTERMEDIATE
PLANNING
(six months to two years)

LOWER MANAGEMENT

Unit Managers
First Line Supervisors

OPERATIONAL
PLANNING
(one week to one year)

THE PLANNING PROCESS

1. SETTING ORGANIZATIONAL, DIVISIONAL OR UNIT GOALS

-The first task of the engineer manager is to provide a sense of direction to his
firm, to his division or to his unit. The setting of goals provides an answer to the
said concern.
2. DEVELOPING STRATEGIES OR TACTICS TO REACH THOSE GOALS
-Determining resources needed and setting standards.
-GOALS may be defined as the precise statement of results sought, quantified in
time and magnitude, where possible.
(After determining the goals, the next task is to devise some means to realize
them. The ways to realize the goals are called strategies.)
-STRATEGY is a course of action aimed at ensuring that the organization will
achieve its objectives.
3. DETERMINING RESOURCES NEEDED
-The engineer manager will determine the human and nonhuman resources
required by such a strategy. To satisfy strategic requirements, a general statement
of needed resources will suffice.
4. SETTING STANDARDS
-Standard is a quantitative or qualitative measuring device designed to help
monitor the performances of people, capital goods, or processes.

TYPES OF PLANS
Plans are may be classified in terms of FUNCTIONAL AREAS, TIME HORIZON, AND
FREQUENCY OF USE.

 FUNCTIONAL AREA PLANS

1. MARKETING PLAN
- This is written document for implementing and controlling an organizations marketing
activities related to particular marketing strategy.
2. PRODUCTION PLAN
-This is 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
-Document that indicates the human resource needs of a company detailed in terms of
quantity and quality based on the requirements of the companys strategic plan.

PLANS WITH TIME HORIZON

1. SHORT-RANGE PLANS
-Plans intended to cover a period of less than one year. First-line supervisors are mostly
concerned with these plans.
2. LONG-RANGE PLANS
-Plans covering a time span of more than one year. These are mostly taken by middle and
top management.

PLANS ACCORDING TO FREQUENCY OF USE

1. STANDING PLANS
-Plans that are use again and again and focus on managerial situations that recur
repeatedly. Standing plans may be classified as POLICIES, PROCEDURES, and
RULES.

POLICIES
-Broad guidelines to aid managers at every level in making decisions.

PROCEDURES
-Plans that are describe the exact series of action to be taken in a given situation.

RULES
-Statements that either require or forbid a certain action.

2. SINGLE-USE PLANS
-Plans that are specifically developed to implement courses of action that are relatively
unique and are unlikely to be repeated. Single-use plans may be classified as BUDGET,
PROGRAMS, and PROJECTS.

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

PROGRAMS
-Designed to coordinate a large set of activities.

PROJECTS
-Limited in scope than a program and is sometimes prepared to support a program.

PARTS OF THE VARIOUS FUNCTIONAL AREA PLANS

CONTENTS OF THE MARKETING PLAN

1.
2.
3.
4.
5.
6.
7.

The Executive Summary

Table of Contents
Situation Analysis and Target Market
Marketing Objectives and Goals
Marketing Strategies
Marketing Tactics
Schedules and Budgets

8. Financial Data and Control

THE CONTENTS OF THE PRODUCTION PLAN

1. The amount of capacity the company must have

2. How many employees are required
3. How much material must be purchased

THE CONTENTS OF THE FINANCIAL PLAN

1.
2.
3.
4.
5.
6.

An analysis of the firms current financial condition

A sales forecast
The capital budget
The cash budget
A set of pro forma (or projected) financial statements
The external financing plan

CONTENTS OF THE HUMAN RESOURCES PLAN

1.
2.
3.
4.

Personnel requirements of the company

Plans for recruitment and selection
Training plan
Retirement plan

PARTS OF STRATEGIC PLAN

1. Company or corporate mission

2. Objectives or goals
3. Strategies
MAKING PLANNING EFFECTIVE

PLANNING MAY BE SUCCESSFUL IF:

Recognize the planning barriers

Use of aids to planning

Planning barriers

Managers inability to plan

Improper planning process
Lack of commitment

Improper information
Focusing on the present at the expense of the future
Too much reliance
Concentrating only on the controllable variables

Aids to planning

Gather much information as possible

Develop multiple sources of information
Involve others in planning process