College of Engineering Education

University of Mindanao
Matina, Davao City

In partial Fulfillment of the Requirements

In Engineering Management in (CEE108 - 8301) Engineering Management

TOPIC: Types of Planning and Strategic Planning

Submitted by:
Donna Mae M. Sarcauga
Submitted to:
Engr. Crijamaica L. Ocena

February 11, 2020

 INTRODUCTION

Planning is one of the most important and the first function of management. It is an activity
that managers of all levels have perform. It is extensive in its scope. So all managers across
all levels participate in planning. However, the plans made by the top level manager will
differ from the ones that lower managers make.

What is the difference between Goals and Plans?

GOALS are the targets that management desires to reach while PLANS are the means
or actions which management intends to use to achieve the said goals/targets.

What is planning?

Planning is deciding in advance what is to be done, when, where, how and whom it is
to be done. It includes the selection of objectives, policies, procedures and programs
from among alternatives e.g. daily routine and business.

Importance of Planning

Planning provides direction to all of the organization’s human resource’ managers

and employees, reduced uncertainty and minimize wastes of time, effort and
resources. And it is one of the great importance in all types of organization whether
businesses or non-business, private or public, small or large. In short it helps our
work to be easier and faster.

The organization which thinks much ahead about what it can do in the future is likely
to succeed as compared to one which fails to do so. Because without planning,
business decisions would become random, ad hoc choices.

Degree of Formalization

Formal Planning – it is a structured plan and it has some procedure to follow. E.g. five
years plan of a country.
Informal Planning – it is unstructured plan. It does not have procedure to follow.

Three Main Types of Plans

Strategic Planning - It focuses on the broad future of the organization. Incorporating

both external information gathered by analyzing the company’s competitive
environment and the firm internal resources, managers determine the scope of the
business to achieve the org long-term objectives. Most strategic plans focus on how to
achieve goals three to five years into the future. It relates to matters like new product,
product diversification. It deals with questions such as the following:

What are the company’s mission, vision, and value system?

What business should the company be in?
What specific goals—profitability, market share, sales, technology leadership position.

Tactical Planning - Tactical plans translate the strategic plans into specific parts of
the organizations. They are for shorter time frame and usually focused for 1-2 years.
Instead of focusing on the entire corporation, tactical plans typically affect a single
business within an organization.

Operational Planning - translate the tactical plans into specific goals and actions for
small units of organization. They typically focus on the short term usually 12 months
or less. This plans are least complex than strategic and tactical plans outside of the
department or unit for which the plan was developed. The condition of production
equipment or product quality problems are also short term concerns. Operational
planning is also called platform-based planning because it extrapolates future results
from a well-understood, predictable platform of past experience. Results of such
planning are predictable because they are based on solid knowledge rather than
assumptions.

Examples are the skills of the employees and their attitudes.

STRATEGIC PLANNING

Strategic planning is important but difficult, because no one is prophetic enough to

know what the future holds. In this section, strategic planning will be explored from
different perspectives. Strategic planning is also called discovery-driven planning
(McGrath and MacMillian 1995). In situations involving the definition of the
company’s future direction, most planning inputs are based on assumptions about the
future

The major difficulties of strategic planning can be traced back to three inherent
characteristics of such planning:

1. Prediction of the future. Certain future events are more predictable than others;
for example, seasonal variations of weather and election-year cycles. Other
predictions, such as the forecast of discontinuities—technological innovations, price
increases, changes of governmental regulations affecting marketplace competition—
are virtually impossible to predict accurately. In general, future is uncertain and
varying rapidly and assumptions must be revised steadily.

2. Applicable experience and insight. Strategies cannot be detached from the

subject involved. Planners must have in-depth knowledge and relevant hands-on
experience of the subject at hand in order to set forth useful strategies.

3. Random process of strategy making. The strategy-making process cannot be

formalized, as it is not a deductive but a synthesis process.

Strategic plans often fail due to one or more of the following seven reasons:

1. Not thinking strategically; for example, by limiting the strategy only to short term
needs and processes of the company.

2. Failure to identify critical success factors for the company.

3. Lack of firm and long-term commitment from company management (people,

technologies, management attention, and focus).
 4. Reluctance of senior management to accept responsibility for tough decisions;
incompatible company culture in risk taking.

5. Not leaving enough flexibility in the plans, causing difficulties in adjusting to the
changing environment.

6. Failure to properly communicate the plan and thus not securing support and
management buy-in.

7. Difficulty to implement, as divisions do not always collaborate on futuristic stuff,

while focusing on day-to-day operations.

8. Poor employee compensation scheme, which does not invigorate strategic

planning and implementation.

9. Lack of integration of strategy with implementation.

Methods Used to Plan Strategically

In adopting strategies, companies choose what to do and what not to do. Strategizing
is about making choices. In general, managers use three methods to make choices
(Gavetti and Rivkin 2005):

1. Deduction. Based on data, managers invoke general administrative and economic

principles to a specific situation, weigh alternatives, and make rational choices
(Tregoe and Kepner 2006). This method needs a lot of data, and is useful for mature
and stable industries.

2. Trial and error. Experiment with several options and select one. This is good for
ambiguous, novel, or complex situations in order to experiment and learn from the
experience.

3. Analogies. Various strategic decisions are made by analogies. Decision makers

often think back to a familiar situation, draw lessons from it, and apply those lessons
to the current situation. However, making decisions by analogy must be done
carefully.
Conclusion – Every problems has a solution you only need to plan it well. Because a
goal without a plan is just a wish.

References
Cool, K.(2005)www.blackwellpublishing.com.USA:Blackwell Publishing Ltd.