Types of Plans
Plans can be classified into various types depending on the usage, the length of the planning period and what plans seek to achieve.
On the basis of 'What Planning seeks to achieve?' Plans can be classified as under:
Objectives
Objectives are the desired future position that the management would like to reach.
Management Objectives should be SMART i.e. specific, measurable, achievable, relevant and time bound. These should also be comprehensive i.e. set in all the major areas of the business.
Objectives are usually set by the TOP management and deal with broad issues of the company.
Example: To increase sales by 10% next year.
Strategy
A strategy provides the broad contours of an organization's business. It refers to future decisions defining the organization's direction and scope in the long run.
A strategy is a comprehensive plan for accomplishing organization objectives.
Example: To use Strong Advertising to increase sales.
Policy
Policies are general statements that guide thinking or channelize energies towards a particular direction. They are guides to managerial action and decisions in the implementation of strategy. Policies define the broad parameters within which a manager may function. The manager may use his discretion to interpret and apply a policy.
Examples: To sell on credit basis and cash basis both. Promotions will be from within the company or the existing staff.
Procedure
Procedures are routine steps on how to carry out activities. They contain the details of the exact manner in which any work is to be performed. They are specified in a chronological order.
Example: Procedure of sanctioning long leave of an employee.
Method
Methods provide the prescribed ways or manner in which a task has to be performed considering the objective. It deals with a task comprising one step of a procedure and specifies how this step is to be performed.
Example: Using lecture method, Videos and animation, Role Playing etc. for training the employees.
Rule
Rules are specific statements that inform what is to be done. They do not allow for any flexibility or discretion. It reflects a managerial decision that a certain action must or must not be taken.
Example: To sign the Attendance register on reaching office, No smoking in the factory premises.
Programme
Programmes are detailed statements about a project which outlines the objectives, policies, procedures, rules, tasks, human and physical resources required and the budget to implement any course of action. These will include the entire group of activities.
Programme = Objective + Policy + Strategy +Procedure + Method + Rule + Budget
Example: To Open a new production unit.
Budget
A budget is a statement of expected results expressed in numerical terms. It is a plan which quantifies future facts and figures. Budgets can be sales budget, production budget, cash budget etc.
Example: Sales Budget, Research and Development Expenditure Budget, Cash Budget etc.
Types of Plans - On the basis of Usage and length of the period plans can be:
Single use plans and Standing plans
A plan is a specific action proposed to help the organization achieve its objectives. It is a document that outlines how goals are going to be met.
Single use plans
Single use plans are one-time plans used for one-time activities which are not likely to repeat. These are for meeting the needs of unique situations. Single use plans can be made for one day to few months depending on the length of the event or project in hand.
Example: To construct a mess for the employees.
Programme and Budget are single use plans.
Standing plans
Standing plans also known as repeat use plans are used for repeating situations and are used for years with updating, revisions and modifications.
Example: Method of training to new employees.
Procedure, Policy, Method and Rule are standing plans.
Objectives and Strategy are neither standing plans nor single use plans.
Planning – Keywords and Brief Notes