What are the three types of planning used by management?

Effective planning is the foundation of any successful business. Planning revolves around organizing priorities and resources and it relates to productivity. Since productivity levels directly affect the success of any organization it’s vital that businesses are creating plans that work. When there are issues with leadership there are often flaws in the company’s plan. When a company improves how they plan they can expect all other aspects of the business to improve as well.

The first step to improving a business plan is to make sure that specific issues are being dealt with directly within the plan. This means that there is a clear vision of what a successful execution will look like. Set goals and establish markers so that progress can be measured and necessary changes can be made accordingly to stay on track. Everyone involved should have a clear understanding of what the goals are before the plan is ever put in motion.

There are four types of planning. Each type of plan commits employees within different departments and their resources to specific actions. While there are many different types, the four major types of plans include strategic, tactical, operational, and contingency.

Here is a break down of what each type of planning entails.

Operational Plans

Operational planning can be ongoing or single-use. The latter is usually created for a specific event that will only occur once, such as a unique marketing campaign. Ongoing plans can include rules and regulations, procedures, and the day to day running of the company.

Strategic Plans
Strategic planning is the foundation of an organization. Essentially, strategic plans dictate the important decisions made within a business. Strategic plans can have scopes that range from three years to ten years. These plans include the organization’s mission, values, and vision. A good strategic plan always considers things in the long-term and remembers the big picture.

Tactical Plans

Tactical planning is supportive of the strategic plan. It involves the tactics that will be used to execute the strategic plan. Within a tactical plan, there are specific questions that need to be answered about what it will take to accomplish the goals set in the strategic plan; the most important question being how the company will accomplish the mission. This type of planning is very focused and short-term. Tactical plans are sometimes flexible and often break the strategy down into several parts and assign actionable tasks to each part.

Contingency Plans
Contingency planning is important for any business because there is always the possibility of unforeseen changes. A contingency plan is created for when the unexpected occurs or a major change needs to be made in order to continue towards the goal. Not every change can be anticipated which is why it’s imperative to have a contingency plan in place. Every business leader should understand the importance of having a contingency plan.

A company whose leaders have a clear understanding of the different types of planning can expect to create a successful business that is sustainable.

This blog was originally published on Manoj Basnyat’s website.

Plans commit the various resources in an organization to specific outcomes for the fulfillment of future goals. Many different types of plans are adopted by management to monitor and control organizational activities. Three such most commonly used plans are hierarchical, frequency-of-use (repetitiveness) and contingency plans.

Strategic Plans

Strategic plans define the framework of the organization’s vision and how the organization intends to make its vision a reality.

• It is the determination of the long-term objectives of an enterprise, the action plan to be adopted and the resources to be mobilized to achieve these goals.

• Since it is planning the direction of the company’s progress, it is done by the top management of an organization.

• It essentially focuses on planning for the coming years to take the organization from where it stands today to where it intends to be.

• The strategic plan must be forward looking, effective and flexible, with a focus on accommodating future growth.

• These plans provide the framework and direction for lower level planning.

Tactical Plans

Tactical plans describe the tactics that the managers plan to adopt to achieve the objectives set in the strategic plan.

• Tactical plans span a short time frame (usually less than 3 years) and are usually developed by middle level managers.

• It details specific means or action plans to implement the strategic plan by units within each division.

• Tactical plans entail detailing resource and work allocation among the subunits within each division.

Operational Plans

Operational plans are short-term (less than a year) plans developed to create specific action steps that support the strategic and tactical plans.

• They are usually developed by the manager to fulfill his or her job responsibilities.

• They are developed by supervisors, team leaders, and facilitators to support tactical plans.

• They govern the day-to-day operations of an organization.

• Operational plans can be −

  • Standing plans − Drawn to cover issues that managers face repeatedly, e.g. policies, procedures, rules.

  • Ongoing plans − Prepared for single or exceptional situations or problems and are normally discarded or replaced after one use, e.g. programs, projects, and budgets.

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