A plan is a specific action proposed to help the organization achieve its objectives. It is a document that outlines how goals are going to be met. The importance of developing plans is evident from the fact that there may be more than one means of reaching a particular goal. So with the help of logical plans, objectives of an organization could be achieved easily.
Types of Plan
There are different types of plan. Some of the important types are given and discussed below.
- Strategic Plans
Strategic plans are detailed action steps mapped out to reach strategic goals. These plans apply to the entire organization and position the organization in term of its environment. Strategic plans address the broad issues such as changing conditions, allocation of resources, international competition, etc. Generally such goals are developed by top management after consulting board of director and middle management. The time horizon of strategic goals exceeds 3 to 5 years.
- Tactical Plans
Tactical plans are developed to support the implementation of the strategic plans. These are important to the success of strategic plans and cover intermediate time horizon usually encompassing 1 to 3 years. Such plans are developed by middle managers after consulting lower-level managers. Tactical plans are more specific and concrete than strategic plans.
- Operational Plans
Plans aimed at supporting the implementation of tactical plans and achievement of operational goals. Such plans clearly specify the things needed to be done in the short run, in order to achieve the operational goals. These plans are developed by lower-level managers after consulting the middle managers. The time period of operational plans is less than one year, such as few months, weeks or even days. The success of strategic and tactical plans depends upon the achievement of operational goals.
- Specific Plans
Those plans which are clearly defined and leave no room for interpretation are called specific plans. Such plans require specific stated objectives and do not contain ambiguity. Specific plans require clarity and a sense of predictability that often do not exist therefore they are not preferable.
- Directional Plans
Directional plans refer to the flexible plans that set out general guidelines. Such plans are preferable in dynamic environment where management must be flexible in order to respond to unexpected changes. Managers use the directional plans to remain focused and do not lock themselves into specific goals or course of action.
- Single-use Plan
Single-use plan is one-time plan specifically designed to achieve particular goal that, once achieved, will most likely not recur in the future. Such plan is developed to meet the needs of a unique situation. There are two important types of sing-use plans: programs and projects.
A single use plan aimed at carrying out a special project in an organization that if accomplished will contribute to the long term success of organization. Programs are composed of several different projects and may take more than 1 year to complete.
A project is a plan that organizes a set of limited-scope activities that do not need to be divided into several major parts in order to reach a significant nonrecurring goal.
- Standing Plans
Standing plans are ongoing plans that aimed at providing guidance for performing recurring activities. There are three important types of standing plans which are: policies, procedures, and rules.
Policy is guideline that establishes parameters for making decisions. It specifies the broad limits with in which organizational members are expected to operate. So it means that policy does not mention the specific action but provides a parameter for action.
Procedure is a series of related actions that must be taken to accomplish a particular task. Policy does not allow much flexibility or deviation because they provide detailed step-by-step instructions as to what should be done. In this way procedures outline more specific actions than policies do.
An explicit statement that tells managers what they can or cannot do. Rules do not allow any room for interpretation because it clearly specifies the actions needed to be done in a particular situation.