Engineering Management(Planning)

7/28/2019 Engineering Management(Planning)

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(PLANNING)

ENGINEERING MANAGEMENT

ENGR. MARK ANTHONY I.

CASTILLANO

CHAPTER 2



Definition: It is a pro cess o f deciding the bus iness ob ject ives and chart ing ou t the methods o f

at taining those ob ject ives.

Accord ing to Koontz & O’Donnell

“Planning is an intel lectual process, the consc ious determinat ion of course of

act ion, the basing of decis ion on purpo se,

acts and cons idered est imates ” .

Accord ing to Theo Haimann “Planning is decid ing in advance what is to be done.

When a manager plans, he projects a

course of act ion , for the future, at tempt ing

to achieve a consistent , coordinated



Definition:

Accord ing to Al ford and Beat ty “Planning is the thinking process, the organized

foresight , the vis ion based on fact and

experience that is required fo r in tel l igent

action” .



Nature of Planning

Plann ing is goal – oriented

Plann ing is a primacy

Planning is al l pervasive

Plann ing is intel lectual/rat ional process

Planning is a con t inuo us p rocess

Planning is a precis ion

Plann ing invo lves choice

Plann ing is directed towards ef fic iency

Flexib i l i ty of Plann ing



Importance of Planning

Minim izes Risk and Uncertainty

Leads to success

Focuses Attention on the Organization’s

goal

Faci l i tates Contro l



Steps in Planning Process

Establ ishing Veri f iable Goals or Set of

Goals to be ach ieved

Establ ish ing Planning Prem ises

Deciding the plann ing period

Find ing A lternat ive Courses of Act ion

Evaluat ing and Select ing a Course of

Act ion Develop ing Derivat ive Plans

Measuring and contro l l ing the Progress



Hierarchy of Planning



Types of Planning(According to

Scope)

Corporate Planning - The purpose of corporate planning is to determine the long-

term goals of an enterprise and generate

plans to achieve these goals keeping in view

the probable changes in its environment.

Divis ion/Departmental Planning - It

includes the plans formulated for various

departments or divisions of an enterprise. It determines the scope and activities of a

particular department.

Sector/Group Plann ing - Group or sectional

planning refers to planning for specific groups



Types of Planning(According to

Span)

Long Term Plann ing - It takes into account the forecasted changes in the environment over the long-term. It provides the overall targets towards which all activities of the

organization are to be directed. Also known asstrategic planning .

Medium Term Plann ing - It more detailed and specific than long range strategic

planning. It is designed to implement strategic plans by coordinating the work of different departments. Also known as tact ical

planning .

Short Term Planning – Also known as



Difference between Strategic

Planning and Tactical Planning



Essentials in making Effective Plans It should be based on clearly defined objectives.

It must be simple and easily understandable.

It should be flexible or adaptable to changing

conditions.

It must be balanced in all respects and should be

reasonably comprehensive. It should provide standards for the evaluation of

performance and actions.

It should be economical. I.e., permit optimum use of available resources before creating new authorities

and new resources.

It should be practicable or action oriented.

It should be prepared with the consultation of



Types of Plans

Stand ing Plan/Mult i – Use Plan

a. Missions /Purposes

b . Objec t ives /Goals c. Strateg ies

d . Polic ies

e. Ru les f. Procedures



Types of Plans

Single Use Plan/Ad hoc Plan

a. Programme

b. Budget c. Schedu le

d . Pro ject

e. Method



Standing Plans Miss ions - Mission is a statement that defines

the role that an organization plays in the society.It represents the overall philosophy of anorganization.

Object ives/Goals - Objectives are the resultswhich management wants to achieve throughthe making and implementation of a plan.

Strategies - It is a special type of plan

prepared for meeting the challenges posed by the activities of competitors and other environmental forces.

Polic ies – Policy is defined as a statement of

guidance and instruction; which defines and



Standing Plans

Rules - A rule is a specific and detailed guide to

action. It is also a standing plan, as they prescribe in advance what is to be done or not

to be done in a specific situation. The top

management derives rules.

Procedures - A procedure, as a type of management plan, specifies the manner of

handling an organizational activity - in terms of

various steps to be undertaken.



Ad Hoc Plans

Programme - A programme is a plan of action -indicating what work is to be done to carry out a

particular objective.

Budgets - A budget is a plan, which statesexpected results of a given future period innumerical terms. It is a plan of action or blueprint designed to achieve a specific goal. It may beexpressed in time, money, or other measurableunits.

Schedules - A schedule is a time – table of work.It specifies the date when a task is to begin and the time needed to complete each task.

Projects - A project is a complex scheme for theinvestment of resources, which can be analyzed



Summary of Various Plans



Difference Between Policies and

Strategies



Difference Between Policy and

Procedures



Difference Between Policies and

Rules



Difference Between Objectives and

Policies



Definition of Objectives

Objectives are the results which management

wants to achieve through the making and implementation of a plan.

According to Luis Allen, “Objectives are goals

established to guide the efforts of the

company and each of its components” .



Characteristics of Objectives

An organizat ion has mult ip le ob ject ives.

Object ives have t ime span. Objectiv es are either tangib le or in tang ible.

Object ives form a hierarch y.



Hierarchy of Objectives





Objectives of MBO

To measure and judge performance.

To relate individual performance to organizational

goals;

To clarify both the job to be done and the

expectations of accomplishment.

To foster the increasing competence and growth

of the subordinates.

To serve as a basis for judgments about salary and promotion

To stimulate the subordinates’ motivation; and

To serve as a device for organization control and

integration.



Features of MBO

MBO focuses attention on what must beaccomplished (goals) rather than on how it is tobe accomplished (methods). It is a goal-oriented rather than work-oriented approach.

MBO involves participation of subordinatemanagers in the goal setting process. It requiresall key personnel to contribute maximum toachieve the overall objectives.

MBO stresses measurable and verifiable goals inkey result areas. It attempts to blend and balancethe goals of all key personnel.

MBO is a dynamic system, which seeks tointegrate the company’s need to achieve its

objectives with the manager’s need to contribute



Features of MBO

MBO is an overall philosophy of management that allows management to attain maximum

results from available resources. It is not a set of

rules or procedures but a way of thinking about

managing. MBO has an operational thrust involving linkage

between organizational goals and individual

goals.

MBO is a continuous process of goal setting,

periodic appraisals and modification of goals and

performance.

It sets an evaluative mechanism by which the

contribution of each individual can be measured.



Steps in MBO Process

Preliminary goal – setting

Fixing Key Result Areas(KRA)

Settling subordinate objectives Recycling Objectives

Action Planning

Periodic Performance Reviews

Final Appraisal



MBO Process



Advantage and Disadvantage of

MBO



Management By Exception

Management by exception is a system of

identification and communication the signalsto the manager when his attention is needed.



Features of MBE

Measurement

Project Analyses

Selection Observation

Comparison

Decision Making



Advantage of MBE

Save time consumptions for executives

Better delegation of authority Better use of knowledge and available data

Enhance decision – making

Enhance degree of communication



Assignment:

Give at least one example of the following:(a) Strategic Plans

(b) Tactical Plans

(c) Operational Plans Give at least three(3) definition of organizing

as function of management.

Explain the process of organization.

What is the significance of organization

structure?

State the principles of organization.



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Engineering Management(Planning)