TYPES OF PLANNING IN BUSINESS

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TYPES OF PLANNING IN BUSINESS

Planning is an intellectual process of thinking resorted to decide a future course of action regarding:

  • What to do?
  • How to do?
  • Who will do it?
  • When to do?

Planning is first and foremost function of the management of ‘THINKING BEFORE DOING’. It is a bridge between the present situations and future circumstances. Planning may be classified on two main bases:

types of planning in business
TYPES OF PLANNING IN BUSINESS

ON THE BASIS OF FOCUS

  • CORPORATE PLANNING

Corporate Planning is the planning which is done for the whole enterprise. It lays down the basic goals, strategies and policies for the enterprise as a whole. It integrates the various functional plans and also provides for future contingencies.

ACCORDING TO HUSSEY

“Corporate planning includes setting of objectives, organising the work, people and systems to enable those objectives to be attained, motivating through the planning process and through the plans, measuring performance and so controlling progress of the plan and developing people through better decision making, clearer objectives, more involvement and awareness of progress.”

FEATURES OF CORPORATE PLANNING

  • It takes the view of whole organization.
  • It is a top level management activity.
  • It is not synonymous to the long term planning.
  • It is usually taken as the starting point of planning process.
  • It integrates various functional plans and provides for future contingencies.
  • This planning matches the resources of the organization to the opportunities and threats in the external environment.
  • It is related to total planning activity and not to the various managerial functions.
  • Corporate planning is divided into the short range planning, tactical planning, long range planning or operational planning.
  • STRATEGIC PLANNING

Strategic planning is the process of planning as to how to achieve organizational objectives with the available resources. It is undertaken by the central management of the business. It is done by the top management by setting objectives first and then planning to achieve them. Top management is responsible for assessing the resources and then things are planned for up to 10 years. Startegic planning basically deals with:

  • Total assessment of the organization
  • Strengths of the organization
  • Capabilities and weaknesses of the organization.
  • Objective evaluation of the environment etc.

FEATURES OF STRATEGIC PLANNING

The following are the features of strategic planning:

  • The basic mission and goals of the organization, nature of business and nature of customers are clearly stated.
  • It is a long term planning.
  • It provides cohesiveness in the company’s policies and activities over a longer period.
  • The plans made are considered more strategic if they affect more management functions.
  • It is concerned with both formulation of goals and selection of the means by which they are to be attained.
  • It is designed to improve organization’s relations with environment.
  • It is comprehensive and unifies plan for the deployment of scarce organizational resources.
  • It sets the direction of organization’s activities for the attainment of the goals.
  • OPERATIONAL PLANNING

Operational planning involves the conversion of strategic plans into detailed and specific action plans. These plans are designed to sustain the organization in its current products and existing markets. This planning is mainly concerned with the efficient use of resources already allocated and with the development of a control mechanism to ensure efficient implementations of the action so that the business objectives are achieved.

EXAMPLE: If there is sudden change in the prices of products and there is difficulty in procuring the raw materials, then operational planning can be done to solve these unforeseen contingencies.

FEATURES OF OPERATIONAL PLANNING

The following are the features of operational planning:

  • It is also known as short term or tactical planning.
  • Its time duration is normally up to one year.
  • It involves conversion of strategic plans into detailed and specific action plans.
  • It is done at usually middle or lower level of management.
  • This planning is done to provide support to the strategic planning.

ON THE BASIS OF TIME

 On the basis of time the planning may be divided into short term planning or long term planning. The detailed description is as follows:

  • LONG RANGE PLANNING

Long range planning defines the mission of the organization, specifies its product market position and outlines its major strategies and policies. These plans are prepared after the proper analysis of the firm and its external environment and forecasts of the events. It generally deals with:

  • Manpower planning.
  • Financial resources.
  • Product planning.
  • Research and development.
  • Organizational structure.

This planning is done by the top management. All the factors of internal as well as external business environment are studied and analyzed while formulate long term plans. This planning is done generally for 3-5 years but it may extend to 10 or 20 years also.

  • SHORT RANGE PLANNING

Short range plans is generally for one year. These plans are very specific and detailed. These plans are worked out with the available resources only. These plans are made to support the long range planning. These plans are aimed at sustaining the organization in the production and distribution of current products services to the existing markets.

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TYPES OF PLANNING IN BUSINESS
TYPES OF PLANNING IN BUSINESS

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