Types of Plan (Types of Planning)
Planning is a formal process and a schedule to complete work. Every organization has to prepare a plan to achieve a predetermined objective in time. Plans may be prepared either for a short period or a long period and may be prepared by the top-level management or subordinate-level management. Generally, there are seven types of plan or planning:
- Corporate plan
- Tactical plan
- Operational plan
- Single-use plan
- Standing use plan
- Specific plan
- Flexible plan
Further, these, types of plan can be categorized on the basis of their nature and work. As such:
Types of Plan, On The Basis of Hierarchy
On the basis of hierarchy, plans are of three types corporate plan, tactical plan, and operational plan. A brief discussion on these plans types are:
Corporate Plan
A corporate plan is a long-term plan prepared by the top-level management. It gives the reason for the existence of the organization. It clearly defines the objectives of the organization and the strategy to achieve defined objectives. The strategy involves a clear explanation of how to achieve the defined objectives. There is a high degree of uncertainty in a strategic plan.
Tactical Plan
The tactical plan is prepared by the middle-level management. It is consistent with the corporate plan. It is the sub-division of the corporate plan to be implemented in the practical field. The divisional managers identify the priority of the activities and prepare plans on the basis of the priority of work. They focus on allocating resources on the basis of programs. It is prepared to perform divisional or departmental activities like production, finance, marketing, personnel, etc.
Operational Plan
The lower-level management prepares this operational plan. It is consistent with the tactical plan. It is a specific action plan for each and every activity of the unit. It involves the schedule of each unit of work to implement a tactical plan. It concentrates on the best use of available resources.
Types of Plan, On The Basis of Use
On the basis of use, plans are of two types single-use plan, and standing use plan.
Single Use Plan
A single-use plan is prepared for a specific purpose in a non-programmed situation. It is prepared for non-repetitive activities or as its name suggests for single use only. After completion of a defined objective, such a plan becomes worthless. Examples of such plans are project program and budget. Single-use plan types are:
- Programs – Programs are the plan made for achieving special objectives. These are the concrete types of plans prepared with a definite objective to accomplish a certain specific activity. Program is a mixture of procedures, policies, rules, assigned works, and elements necessary for operating the group activity smoothly. For example, the introduction of a new product in the market.
- Budget – Budgets are the forecasting of the expenditure estimated for future plans. Costs can be controlled and regulated with the help of budgets. A budget is a standard on the basis of which the actual performance of people, departments, etc is measured.
Standing Use Plan
A standing use plan is prepared for programmed decision-making situations in an organization. This plan gives broad guidelines for repetitive activities. Such a plan once developed will be implemented in the organization to achieve organizational objectives in different situations.
Examples of such plans are objectives, rules, policies, procedures, and strategy. A brief explanation to standing use plan types as:
- Objectives – The first important of planning is to lay down the objectives. Objectives represent the end of all other activities of management are directed. Objectives are the goals, aims, or purposes that organizations wish to achieve over varying periods of time.
- Strategy – Strategy is the determination of basic long-term goals and objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary to achieve goals. Strategies are used to maintain a business institution viable to meet the competitive situations.
- Policies – A policy is the verbal, written, or implied overall guidelines that supply the general limits and direction in which managerial action takes place. Policies provide guidelines in the decision-making process. Policy as a general statement of understanding lays down the limits under which decisions are to be made and thereby assures consistent and unified performance.
- Procedures – Procedure prescribes the methods through which work to be performed. It specified a chronological sequence for handling activities. It lays down the specific manner in which a particular activity to be performed. It is a series of detailed steps indicating how to accomplish a task.
- Rules – A rule is a prescribed guide for conducting an action. The rules provide the conditions of handling the work. Rules signify some kinds of regulations and permit no discretion in their application. A rule requires specific and definite action with respect to a situation.
Types of Plans, On The Basis of Flexibility
On the basis of flexibility, plans are of two types specific plan and flexible plan.
Specific Plan
A specific plan is developed for a particular department or unit about the activities to be performed. Members of an organization are clear about the task to be performed and resources to be used. All clearly stated plans are specific plans.
Flexible Plan
A flexible plan is changeable on the basis of time and situation. It is not specific in terms of procedures and allocation of resources. Such a plan only provides guidelines to the members. The members can modify such plans o the basis of their facility and requirement.