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