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Types of Planning

The document discusses different aspects of organizational planning including: the types of activities covered (corporate and functional planning), the importance of strategic vs operational planning, appropriate time periods for planning (long term vs short term), proactive vs reactive approaches, and the degree of formalization (formal vs informal planning). It provides definitions and comparisons of these key elements of the planning process.

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42K views8 pages

Types of Planning

The document discusses different aspects of organizational planning including: the types of activities covered (corporate and functional planning), the importance of strategic vs operational planning, appropriate time periods for planning (long term vs short term), proactive vs reactive approaches, and the degree of formalization (formal vs informal planning). It provides definitions and comparisons of these key elements of the planning process.

Uploaded by

api-3728874
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Made By

Prathmesh N. Shah
Planning

Activity  Formu‐ Importance


Period Approach
Covered lation

Long Short Formal Informal


Term Term

Proactive Reactive

Corporate Functional Strategic Operational


[A] Activities Covered
[1] Corporate Planning
ƒ Determines long‐term objectives of org. as a 
whole
ƒ Generates plans to achieve these objectives
ƒ Future Oriented
ƒ Integrated
[2] Functional Planning
ƒ Undertaken for sub‐functions within each major 
function
ƒ Derived from Corporate Planning
ƒ Segmental
[B] Importance of Contents
[1] Strategic
ƒ Sets long‐term direction of org. which it wants to 
proceed in future
ƒ Encompasses all functional areas of Business
ƒ Involves analysis of environmental factors
ƒ Period is a problem
[2] Operational
ƒ Tactical/Short‐term Planning
ƒ Aimed at sustaining the org. in its production and 
distribution of current products and/or services to 
existing markets
[C] Time Period
ƒ Depends upon the type of Business and structure 
of the organisation
ƒ What may be a long‐term period of planning for 
one organisation may be a short period for 
others.
ƒ Ideal planning period depends upon 
Commitment Principle:
“Long‐range planning is not really planning for 
future decisions, but rather planning the future 
impact of today’s decision.”
[1] Long Term Planning
ƒ Strategic in Nature
ƒ Involves, generally, 3‐5 yrs
ƒ Involves analysis of environmental factors

[2] Short Term Planning
ƒ Operational in nature
ƒ Involves 6 months‐1 yr
ƒ Aimed at sustaining organisation in its 
production and distribution of current products 
and/or services to existing market.
[D] Approach
[1] Proactive Planning
ƒ Designing suitable course of action in 
anticipation of likely changes in relevant 
environment
ƒ To take decisions in advance

[2] Reactive Planning
ƒ Organisations response comes after 
environmental changes have taken place
ƒ Useful for fairly stable environment over a long 
period of time
[F] Degree of Formalisation
[1] Formal Planning
ƒ Taken by larger org.
ƒ Well‐structured, systematic process
ƒ Involves different steps
ƒ Rational
ƒ Well‐documented and regular
[2] Informal Planning
ƒ Taken by smaller org.
ƒ Part of Manager’s regular activities
ƒ Based on Manager’s:
ƒ Memory of events
ƒ Intuition
ƒ Gut‐feeling

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