Types of Planning

Published by: Madhubala Minda

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The various types of planning and ongoing plans come in handy for the entire organization as it helps to meet specific objectives and organizational goals. Planning is a step-by-step process that top managers undertake in an organization to meet the changing circumstances of the company

Business entities use various types of plans like contingency, strategic, tactical and operational plans to achieve the company’s mission and goals

What is Organizational Planning?

Organizational Planning is defined as a complex process that is concerned with the internal environment of a business entity. It explains the reason for its existence, develops goals that will support the original plan and create processes and procedures that will help to achieve tasks to meet the predetermined goals.

Understanding the Term Types of Planning

Planning begins with the multilevel involvement of top-level management to utilize resources, back the organization’s mission, develop a process, create procedures and make new plans for the future to meet the long-term goals as well as the short-term goals along with the specific objectives of the company

Both long term and short-term plans are important for a company hence the top managers are involved in the planning process which is considered an integral part of managerial functions.

Planning is a complex process that offers support to the human resources in doing actual work efficiently. It also takes into consideration all the other resources that are equally important for the entire organization.

The four types of planning which include strategic, tactical, operational and contingency plans are stepping stones in achieving organizational goals. The plans have an interlinked relationship because operational plans are vital to achieving tactical plans which in turn helps to achieve strategic plans. Then there are also backup plans called contingency plans or alternative courses that are used when the three basic types of plan fail to deliver.

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Major Types of Planning

Major Types of Planning

There are four major types of planning with each type being a subset of the prior. Out of the four types of plans strategic planning is considered the foremost followed by tactical planning, operational planning and contingency planning.

All the four types of plans are equally important in the organization as they together can help to face any disturbance in the external environment or a natural disaster and find alternative courses to achieve desired success and growth

The four types of planning are as follows-

1. Strategic Planning

Strategic planning is the first phase of the planning process that reveals the overall picture of the company. It is designed with the entire organization in mind and reveals the organizational goals for a specific time frame which can be anything from three years to ten years or less than one year.

Strategic planning is often considered the framework for the lower-level planning process. It is the base on which all the ongoing plans, long-term and short-term plans are created

Strategic planning makes sure that the entire organizational goals align with the company’s mission, values and vision to the fullest. It requires multilevel involvement so that all the levels of the organization play a significant role in achieving strategically planned goals and strategic objectives

In strategic planning, the top-level managers like the president or CEO are entrusted to develop, design and execute strategic plans as it lays the groundwork for future activities. Small business entities often involve all the employees for their input while defining the company’s mission, vision and values and creating strategic plans.

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Strategic planning helps the business to describe the desired future and long-term goals. It looks ahead to where the company wants to be in five, ten or even fifteen years. Top management creates long-term plans and strategies with help of strategic plans to achieve desired growth, improve productivity, boost efficiency and increase profitability.

Strategic planning helps a business improve customer service. It also creates a step-by-step process and strategy that gives back to the community in which the organization operates

2. Tactical Planning

The second type of planning phase is tactical planning which reveals how the company is going to implement the strategic plan

Tactical planning includes short-term goals that are generally completed in less than one year. The tactical plans offer complete support to the strategic plans and make sure that the strategic planning is being carried out as desired by the business entity

Tactical plans translate the strategic plans into specific plans that are relevant to a particular department of the organization like the sales department or the purchasing department.

The tactical planning is carried out by middle managers who are responsible for overseeing the tactical plans and strategies like planning and marketing. The lower-level managers are responsible for making sure that the tactical plans are supporting the strategic plans

When a strategic plan is in place it is the tactical plans that offer full backing and makes sure that the process is running smoothly. The manager starts looking at the possible scenarios where it will take the help of the tactical plan and make sure that the strategic plan is inching closer to the long-term goals of the organization

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3. Operational Planning

The third type of planning phase is operational planning which follows strategic plans and tactical planning. The operational plan reveals the intention of the company related to actual work and how the employees or human resources will execute the tactical plans.

The operational plan is used as a means to control the implementation of the tactical plan. This type of planning acts as a guideline to achieve the organization’s mission

Operational plans include rules, regulations, policies, procedures, work schedules and specific tasks that relate to strategies concerning tactical plans. These are resource focused and used in functional areas of the entire organization.

Operational planning is the responsibility of the low-level managers or the frontline workforce who create the operational plan which is focused on specific processes and procedures within the lower levels of the organization.

Operational activities include scheduling employees to the right department, stocking inventory, performance appraisals, creating budgets and developing marketing strategies

Operational plans can be ongoing plans or single-use plans.

A. Single-use plans

Single-use plans are operational plans created with the purpose of a single usage for example a single marketing event. These types of operational plans are discarded or replaced after a single-use. The single-use plans include programs, projects, budgets, goals and organizational objectives

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B. Ongoing Plans

An ongoing plan, also referred to as a continuing plan, is created once but it retains its value over a long period. The ongoing plans undergo periodic updates and revisions to maintain their worth.

The ongoing plans include policies for upcoming problems, rules for regulations and procedures for a step-by-step process to accomplish organizational objectives

4. Contingency Planning

The fourth and last type of planning phase is contingency planning which follows the strategic, tactical and operational planning. Contingency planning refers to the alternative course of action that is used to deal with situations that occur unexpectedly or when assumptions turn wrong.

Organizations create contingency plans to deal with a crisis or an unforeseen event that has backfired on the company. These include possible scenarios or alternative course that is taken if any event cause disruption to the planned course of action

Most business entities have a desire to develop contingency planning for emergencies like the sudden departure of top-level management, malfunctioning software or dealing with the external environment and a natural disaster like hurricanes or earthquakes etc.

The contingency plan stipulates the chain of command that will be followed in case of emergencies, the communication channels that the organization and its employees will use and the operating procedure that will be applicable in such a scenario.

Most organizations have set up periodic training programs in place so that the employees could know about the contingency plans and how to follow them in case of an emergency. This is a good strategy as following the contingency plan and becoming familiar with all the aspects of the contingency planning helps the employees to maintain their cool, act naturally and prove helpful during disruptive events.

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The 5 Steps of Organizational Planning Process

Process Steps of Organizational Planning

The steps of organizational planning include the following

1. Develop the strategic plan

The first step of organizational planning is to develop a strategic plan. This is the initial stage where the organization’s mission, values and vision are reviewed and information about the company is collected like performance appraisals and metrics from the sales department and the purchasing department.

The strategic plans are developed by the top-level manager along with other important people from the management team. They consider how the actual work can be completed, the changing circumstances of the future, the time frame concerning business activities, the high degree of disruption in the external environmental factors and the alternative courses of action if things go wrong.

An important part of the strategic plan is performing the SWOT analysis that will reveal the threats, opportunities, weaknesses and strengths of the company.

The strategic plan sets up a big picture of the entire organization that includes mission, values, vision, data and SWOT analysis

2. Converting the strategic planning into tactical planning

The second step of the organizational planning is to convert the strategic plan into tactical planning steps with help of middle managers.

This is the time to define the short-term goals that will be supporting the strategic plan for every department for instance the sales department and the purchasing department.

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Develop contingency plans that will act as alternative courses in case of disaster or in case the strategic and tactical plan fails

3. Planning daily operations

The third step of the organizational planning is developing the operational plan. These are concerned with the daily activities of the organization and are important for the growth and success of the company.

The operation planning strategy includes individual tasks, customer service, work schedules, setting goals and setting targets that each employee should fulfil during a set period.

4. Execute the different types of plans

The fourth step of the organizational planning is to execute the plan of action that has been created to date. This is the time when strategic, tactical and operational plans come into motion to fulfil the organization’s goals and organizational plans

5. Monitoring the different types of plans

The last step of the organizational planning is to monitor the above-mentioned plans at regular intervals. Every plan be it strategic, tactical, operational or contingency plan requires a period of contemplation. After a short-term goal period, the managers should review the progress and make viable adjustments along the way in the strategic plans, tactical plans, contingency plans and operational plans

Conclusion

What are the different types of planning is an important question whose answer every top-level manager should know about in an organization.

Planning begins with creating short term goals as well as long-term goals that can fulfil the original plan of the organization. When the top-level managers are aware of the intricacies concerning all the aspects of organizational planning they can develop a full-proof process that works in favour of the entire organization.

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Madhubala Minda

Madhubala Minda is a content writer for Digiaide. She writes unique and research-driven content on various Brands, Competitors, Management topics and wellness. With years of content writing under her belt, Madhu Bala is one of the strengthening pillars of Digiaide content team.