Planning is based on the theory of “thinking before acting”. Planning is an integral part of our life. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is to set goals and to make certain guidelines achieve the goals. Also, Planning means to formulate policies, segregation of budget, future programs etc. The success or failure of the organization depends upon the planning. These are all done to make the activity successful. Planning is the most basic and primary function of management. It is the pre-decided outline of the activities to be conducted in the organization. Planning is the process of deciding when, what, when where and how to do a certain activity before starting to work.

According to Theo Haimann, “Planning is deciding in advance, what is to be done. When a manager plans, he projects a course of action for the future, attempting to achieve a consistent, coordinated structure of operations aimed at the desired results.

According to Alford and Beaty, “Planning is the thinking process, he organized foresight, the vision based on fact and experience that is required for intelligent action.”

In conclusion, a planning is a process of thinking before doing. It involves deciding in advance the objectives be achieved and selecting the means for their achievements. It bridges the gap between where we are and where we want to go.

On the basis of nature

  • Operational Plan: Operational plans are the plans which are formulated by the lower level management for short term period of up to one year. It is concerned with the day to day operations of the organization. It usually covers functional aspects such as production, finance, Human Resources etc.

  • Tactical Plan: Tactical plan is the plans which are concerned with the integration of various organizational units and ensures implementation of strategic plans on day to day basis. The tactical plan is also known as coordinative or functional plan.

  • Strategic Plan: Strategic plan is the plans which are formulated by the top level management for a long period of time of five years or more. They decide the major goals and policies to achieve the goals. It takes in a note of all the external factors and risks involved and makes a long-term policy of the organization. It involves the determination of strengths and weaknesses, external risks, mission, and control system to implement plans.

On the basis of time:

  • Long Term Plan: Long term plan is the long-term process that business owners use to reach their business mission and vision. It determines the path for business owners to reach their goals. It also reinforces and makes corrections to the goals as the plan progresses.

  • Intermediate Plan: Intermediate planning covers 6 months to 2 years. It outlines how the strategic plan will be pursued. In business, intermediate plans are most often used for campaigns.

  • Short-term Plan: Short-term plan involves pans for a few weeks or at most a year. It allocates resources for the day-to-day business development and management with in the strategic plan. Short-term plans outline objectives necessary to meet intermediate plans and the strategic planning process.

 

The various types of planning are as follows:

On the basis of nature

  • Operational Plan: Operational plans are the plans which are formulated by the lower level management for short term period of up to one year. It is concerned with the day to day operations of the organization. It usually covers functional aspects such as production, finance, Human Resources etc.

  • Tactical Plan: Tactical plan is the plans which are concerned with the integration of various organizational units and ensures implementation of strategic plans on day to day basis. The tactical plan is also known as coordinative or functional plan.

  • Strategic Plan: Strategic plan is the plans which are formulated by the top level management for a long period of time of five years or more. They decide the major goals and policies to achieve the goals. It takes in a note of all the external factors and risks involved and makes a long-term policy of the organization. It involves the determination of strengths and weaknesses, external risks, mission, and control system to implement plans.

On the basis of managerial level:

  • Top level Plans: Plans which are formulated by general managers and directors are called top level plans. Under these plans the objectives, budget, policies etc. for the whole organization are laid down. These plans are mostly long term plans.

  • Middle-level Plans: Managerial hierarchy at the middle level includes the departmental managers. A corporate has many departments like purchase department, sales department, finance department, personnel department etc. The plans formulated by the departmental managers are called middle-level plans.

  • Lower level Plans: These plans are prepared by the foreman or the supervisors. They take the existence of the actual work place and the problems connected with it. They are formulated for a short period of time and called short term plans.

On the basis of time:

  • Long Term Plan: Long term plan is the long-term process that business owners use to reach their business mission and vision. It determines the path for business owners to reach their goals. It also reinforces and makes corrections to the goals as the plan progresses.

  • Intermediate Plan: Intermediate planning covers 6 months to 2 years. It outlines how the strategic plan will be pursued. In business, intermediate plans are most often used for campaigns.

  • Short-term Plan: Short-term plan involves pans for a few weeks or at most a year. It allocates resources for the day-to-day business development and management within the strategic plan. Short-term plans outline objectives necessary to meet intermediate plans and the strategic planning process.

On the basis of use:

  • Single Plan: These plans are connected with come special problems. These plans end the moment of the problems to be solved. They are not used once after their used. They are further re-created whenever required.

  • Standing Plan: These plans are formulated once and they are repeatedly used. These plans continuously guide the managers. That is why it is said that a standing plan is a standing guide to solving the problems. These plans include mission, policies, objective, rules and strategy.

 

The various steps involved in the planning process are:

  1. Analysis of the environment: Planning begins from the analysis of the environment. A planner has to analyze the external and internal environment. For this SWOT analysis is most suitable. Strength and Weaknesses are the internal factors whereas opportunities and threats are the environmental factors which are to be analyzed.

  2. Setting the objectives: The second step of planning is to set objectives and goals for the organization as a whole and for each department. The planner has to determine overall organizational objectives and the departmental objectives. So managers should have an opportunity to contribute their ideas for setting their own objectives and of the organization.

  3. Develop premises: Planning premises are the assumptions about the future on the basis of which the plans will be ultimately formulated. They provide environmental components, facilities and boundaries for the implementation of plan in practical operation.  Forecasting is an essential part of premises. The planning premises are cost of producion, capital investment, cost per unit, employee morale, goodwill etc.

  4. Determine and evaluate alternatives: The fourth step is to search and identify the alternative course of action. A number of alternatives are available to a planner for the attainment of stated objectives. But the most relevant alternatives must be listed down so that selection is made easier. Once various alternatives are identified, they must be well analyzed with their strong and weak points.

  5. Selection of Best alternative: When the alternatives are determined the planner now selects the best alternative. It helps to achieve the objectives and targets. The planner has to select the best and the fittest alternative by considering internal and external environmental factors. 

  6. Formulation of a derivative plan: Derivative plans are the backing plans which are very essential. Once the basic plan has been formulated, it must be translated into day to day operation of the organization. The derivative plan are meant to support the achievement of basic plans. 

  7. Budget formulation: After decisions are made and plans are set the next step is giving them sufficient funds to carry them out. Optimum budgeting must be done for every course of action.

  8. Implementation of a plan: Once the plans are set up, now the plans must be well informed and shared with the employees and managers expecting full commitment and trust. Finally, the plans must be carried out.

  9. Follow up action: Obviously once a plan is carried out it generates certain output. Reviewing the planning process gives feedback to the planner so that corrective measures can be taken if any weaknesses are identified.