Types of plans || Business Studies || Chapter 2 || Class 12 || NEB

Types of Managerial Planning

The major types of managerial planning are discussed briefly as follows:

1. Corporate Planning (Strategic Planning)

   Planning carried out by the top level of management regarding the long-term objectives of the organization is known as corporate planning, also referred to as strategic planning. It defines objectives and formulates strategies to achieve them. Corporate planning is future-oriented, based on the analysis of opportunities and threats, and involves programs, policies, and schedules to efficiently utilize available resources.

2. Tactical Planning (Division Planning)

   Tactical planning is conducted by middle-level management with a focus on implementing corporate plans. It serves as a subdivision of corporate planning and assists in its implementation. Divisional managers identify activity priorities and prepare plans based on these priorities, analyzing the organization's strengths and weaknesses. Tactical planning acts as a mediator between corporate and operational plans.

3. Operational Planning (Unit Planning)

   Operational planning, also known as unit planning, is consistent with tactical planning and is prepared by operating-level management. It pertains to the day-to-day activities of a department, helping to implement tactical plans in practical settings. Operational planning is crucial for maximizing resource utilization at the unit level.

Classification of Plan on the Basis of Uses

Plans can be categorized on the basis of their uses as single-use plans and standing plans:

• Single Use Plan

  Single-use plans refer to non-repetitive plans such as programs and projects. Once the objectives of a project or program are achieved, it is terminated. Budgets are a prime example of single-use plans, as they need to be prepared anew for each period.

• Standing Plan

  Standing plans, also known as permanent plans, are repetitively used to guide business activities. Policies, methods, and procedures are examples of standing plans that are employed repeatedly to carry out various business activities.

Classification of Plan on the Basis of Flexibility

Plans can be categorized based on their flexibility as specific plans and flexible plans:

• Specific Plan

  Specific plans are formulated with clear objectives, methods, procedures, rules, and regulations. These plans do not allow for adjustments and are directed toward achieving specific, predetermined goals.

• Flexible Plan

  Flexible plans can be adjusted according to changes in the business environment. They are adaptable and can be modified to align with changes in both internal and external factors in the business environment, ensuring business survival and success.

Classification of Plan on the Basis of Time

Plans can be classified based on time as long-term plans, mid-term plans, and short-term plans:

• Long-Term Plan

  Long-term plans cover a period of five years or more, depending on the nature of the business. They are strategic plans formulated by top-level management, addressing the mission, vision, goals, policies, methods, procedures, and strategies of the company.

• Mid-Term Plan

  Mid-term plans span over a period of more than one year and less than five years, typically around three years. These plans are formulated by middle-level managers and often represent departmental tactical plans designed to achieve the strategic goals of the enterprise.

• Short-Term Plan

  Short-term plans are associated with operational-level activities and objectives. They typically cover a period of less than one year, or the trading cycle, whichever is shorter. Short-term plans, such as daily work plans, monthly plans, and annual plans, support the achievement of unit or section-level objectives.