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Single used plans such as:
a) Program: is a single use plan designed to carry out a specific project within an organization. The project itself is not intended to remain in existence over the entire life of the organization. Rather, it exists to achieve some purpose. That if accomplished, will contribute to the organization’s long- term success.
b) Budget: is a single use financial plan that covers a specified length of time. It is a statement that expresses the expected results in numerical terms. It may be referred to as “a numberized program”.
Also, we can brief the most common types of plans according to the time dimension in the following;
a) Strategies:
The strategy is the process of achieving a fit between an organization’s capabilities and its evolving environment to achieve a favorable position within the competitive marketplace. Strategies pertain to those destiny-shaping decisions concerning:
· The choice of technologies on which products are based
· The development and release of new products
· The processes for producing products and services
· The way they are marketed, distributed, and priced
· The way the firm responds to rivals
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However, the planning process cannot and should not cover every aspect of an individual’s job or an organization’s activity. Planning should cover the key elements of what is to be accomplished rather than the details which are not critical to the achievement of overall goals or objectives |
b) Tactical or Operational Plan
This is concerned primarily with establishing short- term goals and action programs. Organizations usually carry out formal operational plans on a regular yearly basis however, there are some differences between the strategic and the tactical plans, and we can show these differences in Table 1.1.
Table 1.1: Major differences between strategic and tactical planning
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Area of difference |
Strategic Planning |
Tactical Planning |
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·Individuals involved |
· developed mainly by upper-level management |
· Developed mainly by lower-level management. |
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·Facts on which to base planning |
· are relatively difficult to gather |
· are relatively easy to gather. |
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·Amount of detail in plans |
· Plans contain relatively little amount of details |
· Plans contain substantial amount of details. |
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·Length of time plans cover |
· Plans cover long period of time |
· Plans cover short period of time |
How we can develop a strategic plan?
Strategic planning is a good example of the planning process. Basically strategic planning includes developing alternative courses of actions and choosing one of them. Thus, developing strategic plan involves the following steps:
Step one: Determine the current domain of the enterprise in terms of the scope (i.e., determining the products and services it offers and to whom).
Step two: What are the political, social, and economic trends we have to consider? What product and/or technological changes we anticipate will affect our organization?
Step three: Determine the current strengths and weaknesses. This means that management must analyze the organizations operational, financial, and managerial strengths and weaknesses.
Step four: Decide what target domain (or business) we want to be in and the best strategy for being there. This means, that management must develop alternatives and analyze each in light of the organization’s strengths and weaknesses as well as the opportunities and threats it will face.
Step five: Set specific objectives. Once you have developed a new strategic plan, it should be quantified in terms of goals such as:
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Ex.: Obtain a 20% share of the soft drink market within 5 years, and double advertising expenditures each year for the next 5 years. |
What are the main principles for having effective planning?
There are many, among the most important of them:
(1) Develop accurate forecasts
(2) Gain acceptance for the plan
(3) Make sure the plan is sound
(4) Assign responsibility for planning
(5) Be objective
(6) Keep the plan flexible
(7) Revise your long- term plan every year
(8) Make sure that the plan fits the situation
Why plans fail?
If managers know why plans fail, they can take steps to eliminate the factors that cause failure and thereby increase the probability that there plans will be successful. Plans fail when:
(1) Corporate planning is not integrated into the total management system,
(2) There is a lack of understanding of the different steps of planning process,
(3) Management at different levels in the organization has not properly engaged in or contributed to planning activities,
(4) Responsibility for planning is wrongly vested solely in the planning department,
(5) Management expects that plans developed will be realized with little effort,
(6) In starting formal planning, too much is attempted at once,
(7) Management fails to operate by the plan,
(8) Management fails to grasp the overall planning process,
(9) Financial projections are confused with planning,
(10) Inadequate inputs are used in planning.
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