Management Planning: Types of Plans

Types of Plans

• Strategic plans apply to the entire organization, establishing overall goals and positioning the organization in its environment.
• Operational plans specify details on how to achieve overall goals, covering short time periods.

Characteristics of Plans

• Long-term plans have a time frame beyond three years, although this definition has changed with increasingly uncertain environments.
• Short-term plans cover one year or less.
• Specific plans are clearly defined with little room for interpretation.
• Directional plans are flexible, setting general guidelines without limiting courses of action.
• Single-use plans are one-time plans for unique situations.
• Standing plans are ongoing, providing guidance for repeated activities.

Establishing Goals

• Traditional goal setting involves top-down overall goal establishment, broken down into subgoals for each level.
• Subgoals constrain subordinate behavior, assuming top managers know what is best for the organization.

Approaches to Planning

• Contingency factors in planning include degree of environmental uncertainty and length of future commitments.
• Traditional, top-down approach involves planning by top managers, with formal planning departments and plans flowing down to lower levels.
• Inclusive approach involves employees at each level developing plans suited to their needs, leading to greater sense of planning importance and more effective plan usage.

Criticisms of Planning

• Planning may create rigidity, forcing a course of action in fluid environments.
• Other criticisms exist, but are not specified.