III.

PLANNING
PLANNING DEFINED
Planning is a logical and systematic approach of formulating the objectives, programs,
policies, procedures, budgets, rules and regulations and other types of plans.

THE NATURE OF PLANNING

Four major factors summarize the essential nature of planning. These are:
1. Contribution to purpose and objectives
Planning is required to facilitate accomplishment of business purposes and objectives.
This statement is taken from the nature of organized business.

2. Planning as the first basic function

Since managerial functions of organizing, staffing, directing, and controlling are designed
to support the accomplishment of business objectives, planning is logically performed
before the execution of all other managerial functions. Besides, a plan must be
formulated to accomplish the objectives before any manager knows what kind of
organization structure and job description and qualifications are needed, how to direct
subordinates and what kind of control technique is to be applied. Inevitably, al the
managerial functions must be planned if they are to be effective and difficult.

3. Planning as a function of all managers

Planning is a function of all managers, although the character and scope of planning will
differ from one authority to another. One manager, because of his authority or position in
the organization, may do more planning than another, or the planning of one manager
may be more basic and applicable to a larger portion of the business than that of
another.

4. Planning for efficient organization

The efficiency of a plan is evaluated by the amount it contributes to purpose and
objectives as offset by the expenses and other things required to formulate and
implement it. A plan contributes to the attainment of objectives, but sometimes as too
high or unnecessarily high cost.
PLESE READ: Chapter 3 of Engineering Management Book by Roberto Medina
Know about:
- the different planning activities undertaken at various management levels
- Planning process
- Types of plans
- Making planning effective

LIST OF RESOURCES
1. * Nyambane Osano, Engineering Management 1-Lecture Notes 2013
2. * Roberto G. Medina, Engineering Management 1st Edition, Published by REX
Bookstore Inc., 2002
3. * Romeo A. Sanares, Project Study, 5138 Merchandising, 1996
4. * Max B. Fajardo, Project Construction Management, Jr., 5138 Merchandising, copyright
2000
5. *Conrado E. Inigo Jr.,Management for Filipinos Principles and Applications, Revised
Edition, 1997
6. * Martinez et.al.,Management Theory and Practice, 2nd Edition, Conanan Education
Supply, 1983

LEARNING ACTIVITIES

1. On page 62 of the Engineering management book -by Roberto Medina there are
questions for you to answer. You may submit your answers through email, send
it to jasonrufon21@gmail.com
Don’t forget to include the following on your paper or sheet: subject, name, course, year
block/section and date and time submitted
2. Read Case 3.MOTORBUS COMPANNY: QUE SERA SERA –PG. 63-64,
Engineering Management book by Roberto Medina. Write your impression or
reaction about the said situation on a sheet of paper and submit it via email.

Don’t forget to include the following on your paper or sheet: subject, name, course, year
block/section and date and time submitted and Reaction Paper No. ___
 IV. ORGANIZING TECHNICAL ACTIVITIES
ORGANIZING is the process of grouping together men and establishing relationships among
them, defining the authority and responsibility of personnel by using the company’s other basic
resources to attain predetermine goals or objectives.
Organizing is a management function which refers to the structuring of resources and activities
to accomplish objectives in an efficient and effective manner.
Organizing is the identification of the grouping of work to be done, the delegation of authority
and responsibility to the employees and the establishment of relationships among the personnel
in order to use to maximum advantage the company’s basic material resources in the
accomplishment of a common goal.
Organizing as a PROCESS
Organizing as a process should consider several factors or fundamentals
First, The structure must reflect the objectives and plans because activities of the organization
are based on them.
Second, the structure must reflect authority given to top and middle management.
Third, organization structure, like any other plan should reflect their external environment.
Likewise, the premises of a plan may be economic, technological, political, social or ethical,
which are also true of an organization structure. The organization establishes structure in order
to permit contributions by members of the group and to help people gain objectives efficiently
and effectively in changing future.
Fourth, the organization must be manned. Groupings of activities and the authority of an
organization structure must consider the people’s limitations, customs and traditions.
ORGANIZATION - is a group of individuals who are cooperating willingly and effectively for a
common goal or
- as defined by James Mooney “Organization is the form of every human association for
the attainment of a common purpose”
STRUCTURE – is the arrangement or relationship of positions within an organization
THE PURPOSE OF STRUCTURE
1. It defines the relationships between tasks and authority for individuals and departments.
2. It defines formal reporting relationships, the number of levels in the hierarchy of the
organization and the span of control.
3. It defines the groupings of individuals into departments and departments into
organization.
4. It defines the system to effect coordination of effort in both vertical (authority) and
horizontal (tasks) directions.
Some considerations when structuring an organizations:
 1. Division of labor – determining the scope of work and how it is combined in a job.
2. Delegation of authority – the process of assigning various degrees of decision making
authority to subordinates.
3. Departmentation- the grouping of related jobs, activities or processes into major
organizational subunits.
4. Span of control- the number of people who report directly to a given manager.
5. Coordination- the linking of activities in the organization that serves to achieve a
common goal or objective.
TYPES OF ORGANIZATIONAL STRUCTURES
1. Functional organization (read Engg Management Book by Roberto Medina , pg. 72- 73)
2. Product or Market organization (read Engg Management Book by Roberto Medina , pg.
73- 74)
1. Matrix Organization (read Engg Management Book by Roberto Medina , pg. 74- 76)
2. Line and Staff organization – this utilizes the assistance of experts or specialists. (read
Engg Management Book by Roberto Medina , pg. 79)
TYPES OF AUTHORITY
1. Line authority
2. Staff authority
3. Functional Authority
(read Engg Management Book by Roberto Medina , pg. 76-78)

ORGANIZATIONAL CHART – is a diagram or drawing showing the important aspects of an

organizational structure. It shows the relationship among positions as to authority, responsibility
and accountability and the people who occupy them.
- Is a diagrammatical form which shows important aspects of an organization including the
major functions and their respective relationships, the channels of supervision and the
relative authority of each employee who is in charge of each function (George Terry)
Purpose of an Organizational Chart
- Assists one to view the firm’s structure as a whole.
- It shows the principal divisions and lines of formal authority and responsibility.
- It assists management to divide the different duties or functions in the business
establishment so that they will be performed effectively and efficiently.
- Shows all of those involved in any undertaking, what is each of them is to do and to
whom each is responsible. It shows the grouping of departments for easier direction and
control of activities.
- It is a way of sorting the responsibilities of the positions so that time and effort are not
duplicated and therefore wasted

Types of Organizational Chart

1. Master Chart or Chart of Authority.
 - shows the entire organizational structure. It is a master plan of the principal
departments with lines of authority and responsibility and the mutual relationships of all
departments or major components.
2. Functional Chart.
-shows at a glance the functions and activities of the positions and or departments. It
shows the major responsibilities of departments or positions. Listed below each job title
are brief statements of the responsibilities.
3. Personnel Chart.
-shows the departments in the same relative manner as the functional chart. But instead
of listing the functions, the titles of the positions of the names of persons are indicated.
The chart also shows the class titles of all positions in the department together with their
locations in the organization.

How to Draw an Organizational Chart

Before drawing an organizational chart, one should observe the following procedures.
First, gather the necessary information on the following;
- Existing positions and or departments;
- Objectives, functions and activities of positions and /or departments;
- Organization;
- Lines of authority and responsibility from top management to middle management;
- Functional relationships between line and staff positions/departments;
- Positions and job titles;
- Physical location of each position/department.

The second step is to draw a temporary chart and check it for accuracy with the managers of
the various departments or sections.
Finally, the chart as drawn must be submitted and recommended to top management for
approval and implementation.
The lines of communication, also known as the flow of authority and responsibility should be
specific and clear.
The organizational chart shows the work to be performed, their divisions and their
interrelationships. It shows the vital functions of the top management and the subordinate
functions in successively descending positions, thereby indicating a hierarchy of positions from
top management to rank and file. The chain of command should be clearly established. Staff
department/ personnel should be properly indicated using dotted lines or broken lines. When it
is drawn, it is generally in a pyramid shape, with the few work at the top and an increasing
number of work toward the base. Positions carrying out work at the top of the chart have the
greatest managerial authority and responsibility, while those at the bottom have the least
authority and responsibility.
Positions’ departments on the same horizontal level on the chart indicate equal responsibility
and authority in the organization.
The job titles or the names of the jobs should be shown clearly on the chart.
The organizational chart should be supported by written job descriptions stating the duties and
responsibilities of each job and also a written job specification which indicates the qualification
requirements for the job.
Rules in drawing an organizational chart
1. Boxes or rectangles representing various positions/jobs in the organization should be
grouped and placed according to their levels (top management, middle management,
rank and file) in the organization.
2. The boxes indicating the organizational functions on the same level should be of the
same sizes.
3. Solid/ block lines should connect boxes or rectangles to designate managerial control or
line of authority. Lines of authority do not pass through a box or rectangle. Each box
should have lines indicating its relation to the organizational units above and below it.
These lines should connect the box at the top center and then either at the bottom
center or at the side of the box or rectangle. Dotted/ broken lines should indicate service
in staff relationship.
4. When an assistant to the head of an organizational position acts in the capacity of a staff
or technical assistant without exercising managerial authority over the line organization,
the box should be drawn to the side of the line organization. I could either be on the right
or left side.
5. Staff and service functions are placed under the office or units served, usually to the
right by the dotted lines. They should be rectangles of the same size.

The Elements of Delegation

Delegation is the process of entrusting and transferring responsibility and authority by

the top management to the lowest level.
The elements of delegation are the following;
1. Responsibility
This is the work or duty assigned to a particular position. It involves mental and physical
activities which must be performed to carry out a task or duty. This can be delegated.
The work of the manager can be divided into two categories;
First. The management functions which cover planning, organizing, staffing directing and
controlling activities
Second, the operative functions which include all activities that have to do directly with
their specialization.
2. Authority
It refers to the power or the right to be obeyed. It is also the sum of the powers and
rights entrusted to make possible the performance of the work delegated. Authority
includes such rights and powers with regard to receipt and disbursement of money and
hiring and dismissing of employees. It may sometimes be limited only to the power to
make, consult or give service which is related to the staff function.
 3. Accountability
This is the answerability of the obligation to perform the delegated responsibility and to
exercise the authority for the proper performance of the work.
Accountability cannot be delegated. It is given to the person who accepts the
responsibility and is accountable to only to the extent that he is given the authority to
perform. Each person can be accountable to only one person, his immediate boss.

FORMAL ORGANIZATION AND INFORMAL ORGANIZATION

Every organizational structure has two systems of operation: The formal and informal.
The formal system is composed of the recognized and formalized lines of communication,
authority and control. This system is frequently pictured on the official organizational chart. The
second, or informal system is much more subtle and invisible in the organizational chart.

Formal Informal
- Have planned structure - Not formally planned
- Deliberate attempts to create - Arise spontaneously as a result of
patterned relationships interactions
- Usually shown by a chart - Not depicted in a chart
- Traditionally theory advocates formal - Human relations theory stresses
organization informal organization

While the formal organization have a rigid organization structure, showing the functional roles,
the informal organizations lack rigid structure, showing the functional roles, the informal
organizations lack rigid structure. Often the informal organizations are formed for the purpose of
satisfying some social need. These organizations may exist within the formal organizations or
may exist and operate independently. Various clubs, teams, associates and similar other groups
come under this category. All business, industrial organizations and educational institutions are
formal organizations. (read Engg Mgt book by Roberto Medina pg 68-70)

Committee defined
It is a formal group of persons formed for a specific purpose. It is usually formed to
provide the necessary line-up of expertise needed to achieve certain objectives.
Committees are used as a supplement to the existing formal organization
Committees may be classified as follows:
1. Ad hoc committee – one created for short –term purpose and have a limited life.
2. Standing Committee – it is relatively permanent committee that deals with issues on an
on going basis.
 LIST OF RESOURCES
* Nyambane Osano, Engineering Management 1-Lecture Notes 2013
* Roberto G. Medina, Engineering Management 1st Edition, Published by REX
Bookstore Inc., 2002
* Romeo A. Sanares, Project Study, 5138 Merchandising, 1996
* Max B. Fajardo, Project Construction Management, Jr., 5138 Merchandising, copyright
2000
*Conrado E. Inigo Jr.,Management for Filipinos Principles and Applications, Revised
Edition, 1997
* Martinez et.al.,Management Theory and Practice, 2nd Edition, Conanan Education
Supply, 1983

LEARNING ACTIVITIES

1. On page 82 of the Engineering management book -by Roberto Medina there

are questions for you to answer. You may submit your answers through
email, send it to jasonrufon21@gmail.com
Don’t forget to include the following on your paper or sheet: subject, name, course, year
block/section and date and time submitted
2. Read Case 4.BITS AND PIECES INTERNATIONAL CORPORATION: Little
things mean a lot –PG. 83-87, Engineering Management book by Roberto
Medina. Write your impression or reaction about the said situation on a sheet
of paper and submit it via email.

Don’t forget to include the following on your paper or sheet: subject, name, course, year
block/section and date and time submitted and Reaction Paper No. ___
3. Research work:
Look for an example of an organizational chart of any company or agency showing line
and staff relationship. (Submit it via email.)

4. Draw an organizational chart of your proposed business structure and

classify the type of organizational structures used.( Submit it via email.)