POM/U2 Topic 3 Kinds of Plans
Plans commit the various resources in an organization to specific outcomes for the fulfillment of future goals. Many different types of plans are adopted by management to monitor and control organizational activities. Three such most commonly used plans are hierarchical, frequency-of-use (repetitiveness) and contingency plans.
Types of Plans are
- Hierarchical plans,
- Standing plans,
- Single-use plans, and
- Contingency plans.
1. Hierarchical Plans
These plans are drawn at three major hierarchical levels, namely, the institutional, the managerial and the technical core.
The plans in these 3 levels are-
(b) Administrative and,
(c) Operational respectively.
(a) Strategic Plan: The strategic plan generally involves planning at the top institutional level of an organization. Strategic plans define the organization’s long-term vision and how the organization intends to make its vision a reality. In short, strategic planning is the determination of the basic long-term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals. Strategies do not attempt to outline exactly how the enterprise is to accomplish its objectives since this is the task of countless major and minor supporting programs.
(b) Administrative or Intermediate Plan: Administrative or intermediate planning is done at the level of middle management. It is cone to allocate organizational resources and coordinate internal subdivisions of the organization. It is also a process of determining the contributions that sub-units can make with allocated resources.
(c) Operational Plan: Finally, operational planning is the process of determining how specific tasks can best be accomplished on time with available resources. This is also done to cover the day-to-day operations of an organization. As such, many operational plans are designed to govern the workings of the organization’s technical core.
Standing plans are drawn to cover issues that managers face repeatedly.
For example, managers may be facing the problem of late- coming quite often.
Managers may, therefore, design a standing plan to be implemented automatically each time an employee is late for work. Such a standing plan may be called standard operating procedure (SOP).
Mission or purpose, strategies, policies, procedures, rules are some of the most common standing plans.
(a) Mission or purpose
Mission or purpose, often used interchangeably, identifies the basic task of an organization for which it is created.
For example, the mission of a University is to impart higher education.
The mission of the garments factory is to produce and sell ready-made garments and so on.
The strategy is another type of broad-based standing plan which helps the determination of the basic long-term objectives of an enterprise and adoption of courses of action and allocation of resources necessary to achieve these objectives.
Policies are, in most cases, standing plans. As a matter of fact, policies provide guidelines for repetitive actions.
They define an area or provide limits within which decisions are to be made and ensure that the decision will be consistent with, and contribute to, an objective.
Policies are types of plans that allow decision-makers some discretion to carry out a plan.
Otherwise, there will be no difference between policies and rules.
Policies must allow for some discretion. Policies help decide issues before they become problems and make it unnecessary to analyze the same situation every time it comes up.
Rules Like policies, rules, too, are standing plans that guide action. Rules spell out specifically what employees are supposed to do or not to do.
For example, the no-smoking campaign launched by some organizations is supported by some organizational rules. As opposed to policies, rules do not permit the exercise of individual discretion.
Instead, rules specify what actions will be taken (or not taken) and what behavior is permitted or not. Policies, on the other hand, tell people how to think about decisions to be made about actions.
Procedures Like rules, procedures are standing plans that provide guidance for action rather than speculation.
They are plans that establish a required method of handling future activities.
Procedures establish customary ways for handling certain activities like hiring a clerk, promoting employees, obtaining a loan from a bank.
The major characteristic of a procedure is that it represents a chronological sequencing of events.
Single-use plans are prepared for single or unique situations or problems and are normally discarded or replaced after one use.
Generally, four types of single-use plans are used. These are—
As we already know, the process of planning is based on certain assumptions about what is likely to occur in the environment of an organization.
Contingency plans are made to deal with situations that might crop up if these assumptions turn out to be wrong.
Thus contingency planning is the development of alternative courses of action to be taken if events disrupt a planned course of action.
A contingency plan allows management to act immediately if such unforeseen events as strikes, boycotts, natural disasters or major economic changes render existing plans inoperable or unsuitable.