Introduction to Planning in Detail
For any organization to function distinctively, there must be a plan which is to be devised before-hand. Planning is very important to a business. The top managers must plan their goals both short and long terms with their competent employees and their team of experts to analyze the pros and cons of the plan, the investment required in the plan, the return expected and so forth.
In this discussion, we will know about this managerial function of ‘Planning’ in detail. This is one of the important topics in the study of Business, hence the students must not exclude it.
Types of Planning
In an organization, various, different kinds of planning are included which serves a variety of purposes. As Planning is the most important fundamental, it is not to be compromised with a single plan applied universally in the whole organization. With each department specific need, workforce constituents, the different plans are devised. Predominantly, for the goal of the business, planning is done by the top-level managers, while short-term plans are done by the team leaders too in different departments.
Good Companies give priority to the planning process, as adequate management and competent leadership will follow only after effective planning is done. Companies are required to keep a track on the planning process, to be in sync with the predetermined process.
To Plan Better Companies, You Need to Take Care of The Following Things
Devise a Plan – Important goals needed to achieve, strength of the organization all are required to be forecasted before-hand. Devising a proven plan helps to visualize the goals with much before and thus take action in regard to that.
Define Success – Managers need to foresee where their business stands in the near future. They need to clearly define the milestones that they want to take step on and the same is required to be communicated to the employees.
Put in Action – After much planning, the final process that will actually will help in achieving the goals is to put the plan in action. With the required workforce, the company should start working in the attempt to achieve their set target.
Talking About the Types of Planning, we have
Operational Planning
Strategic Planning
Tactical Planning
Contingency Planning
Explain the Types of Planning
In the section discussed above, we have already mentioned the types of Planning. Here, we attempt to discuss in depth about the four types of Planning.
Operational Planning
Answering the question of “How things need to happen? What are the guidelines to accomplish the set mission?” describes an operational plan. This plan simply means the daily activities which are focused in achieving the goal. Operational Plans are generally the single used plans or the on going plan.
They can also be planned for one-time events or for a specific need. These plans include specific rules and regulations and procedures to stand by it. They provide an adequate guideline for the step to step processing of the work.
Strategic Planning
The reason for planning is chalked out in the strategic plan. Strategic plans are generally long-term thinking processes executed by the top-level managers. It is a big picture to cast a vision and requires mission processing.
It requires a high-level analysis of the entire business. Being the foundational basis of the organization, strategic planning dictates long term goals which normally tenures for two to ten years span.
Tactical Planning
Tactical Plan is the backbone of Strategic Plan. Generally speaking, they are focused, specific and short-term plans. They are the plans that initiate the actual work. Tactical plans form the outline of a strategic plan that eventually structures the organizational plan. Often the tenure of this plan is quite short and mostly lasts to one year. The strategic plans that get chunked into actionable plans are called Tactical Planning.
Contingency Planning
Contingencies might occur in business. To tackle the contingencies, the contingency planning is drafted. Thyer ae also named as ‘Special Planning’ by the business experts. In a situation of change, contingency planning proves to be helpful.
Though managers acknowledge the changes before-hand yet contingency plans help to tackle the unseen changes. With the complicated business world, the contingency plan becomes more of a use.
Types of Policies in Management
Different Policies are used in an organization, that is responsible for each purpose. Following are the types of policies that are being widely used in the business world. –
Organizational Policies – The policies decide the goal of an organization. They are the overall general policy that is administered in an organization.
Functional Policies – The policy is prepared for different functions, like production, marketing, finance and personnel. The functional policies are decided keeping in view of the organizational policies already structured.
Originated Policies – This is also known as the internal policy that prepares policies for subordinates. This policy is being drafted by their managers.
Specific Policies – These policies are formulated in regard to some specific issues.
FAQs on Types of Plans in Business Management: Explained
1. What are the main types of plans in business management as per the CBSE syllabus?
According to the CBSE Class 12 Business Studies syllabus, plans are broadly classified into two categories based on their usage and frequency:
- Single-Use Plans: These are developed for a one-time event or project and are discarded once the goal is achieved. Examples include programmes and budgets.
- Standing Plans: These are recurring plans used for activities that occur regularly over a period of time. They ensure consistency in operations. Examples include objectives, strategies, policies, procedures, methods, and rules.
2. What is the difference between a policy and a procedure in business planning?
A policy and a procedure are both standing plans but serve different purposes. A policy provides a general guideline for decision-making and channelises thinking in a particular direction. For instance, a 'no-credit' policy for sales. In contrast, a procedure outlines the exact chronological steps to be followed to carry out an activity within that policy. For example, the step-by-step process for handling cash sales would be a procedure under the 'no-credit' policy.
3. How do objectives and strategies differ, and why are both crucial for a business?
Objectives are the specific, measurable end results that an organisation aims to achieve within a given timeframe. They answer the question of 'what' is to be achieved (e.g., increase market share by 10% in one year). Strategies, on the other hand, are comprehensive plans that outline 'how' those objectives will be achieved, considering the business environment and competitors. For example, a strategy to achieve the market share objective might involve launching new products or aggressive advertising. Both are crucial because objectives provide a clear target, while strategies provide the roadmap to reach that target effectively.
4. Can you provide a real-world example to explain the difference between a 'method' and a 'rule'?
Certainly. A method is a prescribed way or manner in which a task has to be performed, considering the objective. It is flexible and can have different steps. For example, different methods of training employees include apprenticeship, vestibule training, or e-learning. The manager can choose the most suitable one. A rule, however, is a specific statement that dictates what must or must not be done. It is the most rigid type of plan and allows no discretion. For example, a rule like 'No Smoking in the factory premises' must be followed strictly, and non-compliance has specific consequences.
5. Why is a 'Programme' considered a comprehensive single-use plan?
A programme is considered a comprehensive plan because it is a detailed statement about a specific project that outlines everything required to accomplish it. It acts as a master plan that integrates various other plans. For example, a programme for launching a new product would include:
- Objectives: The goals of the new product launch.
- Policies: Guidelines for pricing and distribution.
- Procedures: Step-by-step process for production and marketing.
- Budget: A financial plan outlining the expected expenses and revenues.
6. What is the importance of a 'Budget' as a type of plan in management?
A budget is a critical type of single-use plan because it quantifies future facts and figures. Its importance lies in several areas:
- Financial Control: It sets a standard for expenditure and revenue, allowing managers to track performance and take corrective action.
- Coordination: It helps in coordinating the activities of different departments by allocating resources according to their needs and importance.
- Performance Evaluation: Budgets serve as a benchmark against which actual performance can be measured and evaluated.
7. How do strategic, tactical, and operational plans relate to different levels of management?
These plans correspond directly to the three levels of management. Strategic plans are long-term, comprehensive plans formulated by top-level management (e.g., CEO, Board of Directors) to define the organisation's overall mission and objectives. Tactical plans are formulated by middle-level management (e.g., department heads) to implement the strategic plans. They are more specific and have a shorter time frame. Finally, operational plans are created by lower-level management (e.g., supervisors) to guide day-to-day activities and ensure the execution of tactical plans.
8. Why can't a business thrive by only using single-use plans like budgets and programmes?
While single-use plans are essential for specific projects and goals, a business cannot thrive on them alone. This is because businesses require consistency and efficiency in their routine, recurring operations. Without standing plans like policies, procedures, and rules, every routine situation would require a new decision, leading to chaos, wasted time, and inconsistent outcomes. Standing plans provide a stable framework that guides employees' actions, ensures uniformity, and allows managers to focus on strategic issues rather than solving the same problems repeatedly.
