have you ever heard the saying that those who fail  to plan plan to fail while i can't speak to all  

facets of life this is certainly true in business  managers find themselves planning for all sorts  

of things so much so that planning is one of the  four major functions of management and in doing  

so a manager can be certain that he or she is  working towards some organizational goal there are  

three main types of plans that a manager will use  in their pursuit of company goals which include  

operational tactical and strategic if you  think about these three types of plans  

as stepping stones you can see how their  relationship to one another aids in the  

achievement of organizational goals operational  plans are necessary to attain tactical plans  

and tactical plans lead to the  achievement of strategic plans  

then in true planning fashion there are also  plans to back up plans that fail these are  

known as contingency plans to better understand  how each type of plan is used by managers let's  

take a look at an example from nino's pizzeria  and how tommy martha and frank carry out their  

planning responsibilities to best understand the  relationship between the different types of plans  

STRATEGIC PLANS

let's start at the top strategic plans are  designed with the entire organization in mind  

and begin with an organization's mission top level  managers such as ceos or presidents will design  

and execute strategic plans to paint a picture  of the desired future and long-term goals of the  

organization essentially strategic plans look  ahead to where the organization wants to be  

in 3 5 even 10 years strategic plans provided  by top-level managers serve as the framework  

for lower level planning tommy is a top level  manager for nino's pizzeria as a top level manager  

tommy must use strategic planning to ensure the  long-term goals of the organization are reached  

for tommy that means developing long-term  strategies for growth improving productivity  

and profitability boosting return on investments  improving customer service and finding ways to  

give back to the community in which it operates  for example tommy's strategic plans for growth  

improving productivity and profitability and  boosting return on investments are all a part  

of the desired future of the pizzeria strategic  plans also tend to require multi-level involvement  

so that each level of the organization plays a  significant role in achievement of the goals being  

strategically planned for top level managers such  as tommy develop the organizational objectives  

so that the middle and lower level managers  can create compatible plans aligned with those  

objectives now that you have a general idea for  how organizational planning evolves let's look  

TACTICAL PLANS

at the next level of planning known as tactical  planning tactical plans support strategic plans  

by translating them into specific plans relevant  to a distinct area of the organization tactical  

plans are concerned with the responsibility  and functionality of lower level departments to  

fulfill its part of the strategic plan for example  when martha the middle level manager at ninos  

learns about tommy's strategic plan for increasing  productivity martha immediately begins to think  

about possible tactical plans to ensure that  happens tactical planning for martha might include  

things like testing a new process and making  pizzas that has been proven to shorten the amount  

of time it takes for prepping the pizza to be  cooked or perhaps looking into purchasing a better  

oven that can speed up the amount of time it takes  to cook a pizza or even considering ways to better  

map out delivery routes and drivers as a tactical  planner martha needs to create a set of calculated  

actions that take a shorter amount of time and  are narrower in scope than the strategic plan is  

but still help to bring the organization closer  to the long-term goal operational plans sit at the  

OPERATIONAL PLANS

bottom of the totem pole they are the plans that  are made by the front line or lower level managers  

all operational plans are focused on specific  procedures and processes that occur within  

the lowest levels of the organization managers  must plan the routine tasks of the department  

using a high level of detail frank the  front line manager at nino's pizzeria  

is responsible for operational planning  operational planning activities for frank would  

include things like scheduling employees each  week assessing ordering and stocking inventory  

creating a monthly budget developing a promotional  advertisement for the quarter to increase  

the sales of a certain product such as the  hawaiian pizza or outlining an employee's  

performance goals for the year operational  plans can be either single-use plans or ongoing  

single-use plans are those plans that are  intended to be used only once they include  

activities that would not be repeated and often  have an expiration creating a monthly budget  

and developing a promotional advertisement for the  quarter to increase the sales of a certain product  

are examples of how frank would utilize single-use  planning ongoing plans are those plans that are  

built to withstand the test of time they are  created with the intent to be used several times  

and undergo changes when necessary outlining an  employee's performance goals for the year would be  

considered an ongoing plan that would frank  must develop assess and update if necessary  

ongoing plans are typically a policy  procedure or rule policies are general  

statements or guidelines that aid a manager in  understanding routine responsibilities of their  

role as a manager examples of policies include  things such as hiring training outlining and  

assessing performance appraisals disciplining and  terminating subordinates a procedure details out a  

step-by-step process of carrying out a certain  task such as assessing ordering and stocking  

inventory a rule provides managers and employees  with specific and explicit guidelines of behavior  

that is what they should be doing and what they  should not do as a member of an organization  

even the best plans can fail especially in  today's fast-paced chaotic business environment  

CONTINGENCY PLANS

and as such it is important for managers at  all levels to engage in contingency planning  

contingency plans allow a manager to be flexible  and change savvy by providing an alternative  

course of action which can be implemented if  and when an original plan fails to produce  

and the anticipated result having a contingency  plan might seem like extra work but much like a  

reserve parachute when skydiving better to have  and not need it than to need it and not have it

LESSON SUMMARY

let's review planning is one of the four functions  of management that allows a manager to develop  

and implement strategic action steps aimed  at reaching an organizational goal there are  

three major types of planning which include  operational tactical and strategic planning  

a fourth type of planning known as contingency  planning is an alternative course of action which  

can be implemented if and when an original  plan fails to produce the anticipated result  

it helps to think about operational tactical and  strategic planning as a set of stepping stones  

where each one plays a part in working towards a  greater organizational goal operational plans are  

necessary to attain tactical plans and tactical  plans lead to the achievement of strategic plans  

achieving organizational goals starts with top  managers who create strategic plans that paint  

a picture of the desired future and long-term  goals of the organization such as increasing  

productivity or profitability these strategic  plans serve as a framework for lower level  

planning tactical plans support strategic plans  by translating them into specific plans relevant  

to a distinct area of the organization tactical  plans are concerned with the responsibility and  

functionality of lower level departments  to fulfill its part in the strategic plan  

such as testing out a new product that can shorten  the production time operational plans are made by  

frontline or lower level managers and are focused  on the specific procedures and processes that  

occur within the lowest levels almost individual  level of the organization examples of operational  

plans include things like scheduling employees  each week assessing ordering and stocking  

inventory or creating a monthly budget operational  plans can be either a single use plan or ongoing  

single use plans are those plans that are intended  to be used only once they include activities that  

would not be repeated and often have an expiration  such as the monthly budget ongoing plans are those  

plans that are built to withstand the test of  time they are created with the intent to be used  

several times and undergo changes when necessary  outlining an employee's performance goals for the  

year would be considered an ongoing plan ongoing  plans are typically a policy procedure or rule