17.3 Types of Plans
3 min read•june 25, 2024
Organizational plans come in various types, each serving a unique purpose. From hierarchical plans that outline long-term strategies to frequency-of-use plans that guide daily operations, these structures help businesses stay on track. Understanding the different categories allows managers to choose the right approach for their specific needs.
, , and form the backbone of organizational planning. provide ongoing guidance, while tackle specific projects. Time-frame and organizational scope plans further refine the planning process. prepare businesses for unexpected challenges, ensuring they're ready for anything.
Types of Organizational Plans
Categories of organizational plans
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- Hierarchical plans ()
- Strategic plans develop long-term, broad plans that define the organization's mission, vision, and overall direction
- Tactical plans create mid-term plans that outline specific strategies and actions to achieve strategic goals
- Operational plans detail short-term plans that specify day-to-day activities and tasks to implement tactical plans
- Frequency-of-use plans
- Standing plans provide ongoing guidance for recurring situations or tasks
- offer general guidelines for decision-making and behavior (dress code)
- give step-by-step instructions for specific tasks or processes (customer complaint handling)
- set strict, specific guidelines that must be followed (safety regulations)
- Single-use plans are created for a specific purpose or project
- develop comprehensive plans for a specific project or initiative (new product launch)
- allocate financial resources for a specific time period (marketing campaign)
- Standing plans provide ongoing guidance for recurring situations or tasks
- Time-frame plans
- Long-term plans extend beyond three years, such as strategic plans
- Mid-term plans cover one to three years, such as tactical plans
- Short-term plans cover less than one year, such as operational plans
- Organizational scope plans
- Corporate-level plans encompass the entire organization and its overall direction
- Business-unit plans focus on a particular division, department, or product line
- Functional-level plans target a specific functional area, such as marketing or human resources
- Contingency plans develop alternative strategies to address potential changes or unforeseen circumstances (natural disasters, economic downturns)
- These plans often require to identify potential threats and opportunities
Components of strategic plans
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- Defines the organization's purpose, values, and primary stakeholders
- Provides a foundation for decision-making and
- Example: "To inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time" (Starbucks)
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- Describes the desired future state of the organization
- Provides a clear, inspiring direction for the organization to work towards
- Example: "To become the world's most loved, most flown, and most profitable airline" (Southwest Airlines)
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- Outlines the specific actions and initiatives required to achieve the organization's mission and vision
- Includes resource allocation, competitive positioning, and key performance indicators
- Example: Expanding into new geographic markets, developing innovative products, or improving operational efficiency
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- Specific, Measurable, Achievable, Relevant, and Time-bound goals that support the overall strategy
Standing vs single-use plans
- Standing plans are used for recurring situations or tasks and provide consistent guidance and standardization
- Policies offer general guidelines for decision-making and behavior
- Example: A company's dress code policy ensures professional appearance
- Procedures give step-by-step instructions for specific tasks or processes
- Example: A procedure for handling customer complaints ensures consistent and effective resolution
- Rules set strict, specific guidelines that must be followed
- Example: Safety rules in a manufacturing facility prevent accidents and injuries
- Policies offer general guidelines for decision-making and behavior
- Single-use plans are tailored to the specific needs and goals of a one-time project or initiative
- Programs develop comprehensive plans for a specific project or initiative
- Example: A program to launch a new product line coordinates marketing, production, and distribution efforts
- Budgets allocate financial resources for a specific time period
- Example: A budget for a marketing campaign ensures efficient use of funds to achieve desired outcomes
- Other examples: A plan for expanding into a new market (international expansion) or a project to implement a new software system (ERP implementation)
- Programs develop comprehensive plans for a specific project or initiative
Plan Development and Execution
- Goal-setting: Establishing clear objectives aligned with the organization's mission and vision
- : Executing the strategies and actions outlined in the plan
- : Assessing the effectiveness of the plan and making necessary adjustments
- : Adapting plans as needed to respond to changing circumstances or new information
Key Terms to Review (21)
Budgets: Budgets are financial plans that outline expected revenues and expenditures over a specific period, helping organizations allocate resources effectively. They serve as a critical tool for managing finances, setting goals, and measuring performance against those goals. By providing a framework for decision-making, budgets ensure that resources are used efficiently and align with the organization's strategic objectives.
Contingency Plans: Contingency plans are alternative courses of action that organizations or individuals develop to prepare for potential problems or unexpected events that may disrupt their normal operations or plans. These plans are designed to provide a backup strategy or response to ensure continuity and minimize the impact of unforeseen circumstances.
Environmental Scanning: Environmental scanning is the process of gathering and analyzing information about events, trends, and relationships in an organization's external environment. It involves continuously monitoring the organization's external environment to identify potential opportunities and threats that may affect its current and future plans and strategies.
Goal-Setting: Goal-setting is the process of identifying specific, measurable, achievable, relevant, and time-bound (SMART) objectives that an individual or organization aims to accomplish. It is a fundamental management practice that helps direct resources, focus efforts, and measure progress towards desired outcomes.
Long-term Vision: Long-term vision refers to a comprehensive and forward-thinking perspective that extends beyond the immediate future, guiding an organization's strategic planning and decision-making processes. It encompasses a clear and ambitious picture of the desired state the organization aims to achieve over an extended period, typically spanning several years or even decades.
Mission Statement: A mission statement is a concise declaration that outlines an organization's fundamental purpose, values, and goals. It serves as a guiding principle that informs strategic decision-making and shapes the overall direction of the business or entity.
Operational Plans: Operational plans are detailed, short-term plans that outline the specific actions and resources required to achieve an organization's objectives. They focus on the day-to-day operations and implementation of higher-level strategic plans.
Operational Strategies: Operational strategies refer to the specific actions and plans an organization implements to achieve its overall business objectives and goals. These strategies focus on the day-to-day operations and processes that enable the efficient and effective execution of the organization's strategic vision.
Plan Evaluation: Plan evaluation is the process of assessing the effectiveness and efficiency of a plan in achieving its stated objectives. It involves systematically analyzing the plan's implementation, identifying areas for improvement, and determining whether the desired outcomes have been met.
Plan Flexibility: Plan flexibility refers to the ability of a plan to adapt and adjust to changing circumstances or unexpected events. It is a crucial aspect of effective planning, allowing organizations to respond to dynamic environments and ensure the continued relevance and success of their strategies.
Plan Implementation: Plan implementation refers to the process of putting a strategic plan into action. It involves the execution of the specific steps and actions outlined in the plan to achieve the desired objectives and goals.
Planning Hierarchy: The planning hierarchy refers to the different levels of planning within an organization, ranging from strategic to operational. It represents the systematic approach organizations take to align their long-term vision and objectives with short-term actions and resource allocation.
Policies: Policies are the guiding principles and rules that organizations establish to direct and govern their operations, decision-making, and overall behavior. They serve as a framework for consistent and aligned actions towards achieving organizational goals and objectives.
Procedures: Procedures are a series of established steps or actions that guide the implementation of a plan or the completion of a task. They provide a standardized and systematic approach to carrying out specific activities within an organization.
Programs: Programs are a set of organized, interrelated activities designed to achieve specific objectives or goals within an organization. They serve as a comprehensive approach to addressing complex issues or initiatives, often involving multiple components and resources.
Rules: Rules are explicit guidelines or regulations that establish expectations and parameters for behavior, decision-making, and actions within a specific context. They provide a framework for maintaining order, promoting consistency, and ensuring the achievement of desired outcomes.
Single-Use Plans: Single-use plans, also known as one-time plans, are specific plans created for a unique, non-recurring situation or event. They are designed to address a specific problem or goal and are not intended for ongoing or repeated use, unlike standing plans or strategic plans.
SMART Objectives: SMART objectives are a framework for setting effective and measurable goals. The acronym SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. This approach helps individuals and organizations create clear, actionable, and meaningful objectives that can be effectively planned, executed, and evaluated.
Standing Plans: Standing plans are predetermined, long-term decisions that provide guidance for repetitive or routine situations. They establish a framework for addressing recurring problems or opportunities, allowing organizations to respond efficiently and effectively to familiar circumstances.
Strategic Plans: Strategic plans are comprehensive, long-term plans that outline an organization's overall direction, goals, and the specific actions needed to achieve them. These plans are designed to guide an organization's decision-making and resource allocation to ensure its long-term success and competitiveness within its industry or market.
Tactical Plans: Tactical plans are short-term, specific plans that outline the actions and resources needed to achieve an organization's operational objectives. They focus on the 'how' and 'when' of implementing strategic plans within a given time frame, typically less than one year.