Types of plans – To achieve objectives of the organization or to get a desired outcome, plans are made. Plans need efforts, time, prediction and commitment. There is not a single task to be performed in an organization. To complete these multiple task, multiple plans are required. Many a times, these plans are from different categories to match up with the organizational policies, beliefs and objective. Plans may also differ because of the basic aim they are made for and the way they will be applied.
Various types of plans are as under:
Objectives mean the desired or target position where the organization wants to reach. Objectives are many a times called ‘ends’. All the organizational activities are focused n achieving these objectives. This is also the first step of planning. Objectives should be clearly defined so that each person working on those objectives can know the exact details of the objective.
Certain characteristics of objectives are:
- Objectives should be simple and easy to understand.
- Measurable or quantifiable
- Attainable or achievable
- Rational or realistic
- Time bound.
Based on these characteristics, objectives should be prepared. For example: a mobile handset manufacturing company wants to increase its production by 10% within 2 years.
Strategy is a plan to achieve organization’s objectives. it includes properly defining the long term objectives and determining the best course of action to achieve those objectives while allocating the resources adequately for the same. Main consideration while formulating a strategy is the business environment. Business environment includes the internal (related to the stakeholders) and external environment (economic, social, technological, legal and political). Strategies are usually formed for taking a correct action to be in that business environment and have a good image.
Strategies can be framed for the internal business environment such as employees, investors etc or it can be formed for the external business environment such as competitors, political environment etc.
For example: selecting a channel of distribution will involve various questions such as what will be cost?, will it be better than the previous channel of distribution?, will it be enough or we need combination of channels of distribution? Etc.
Policies are the general statements or guidelines which are followed by the organization in order to achieve the goals by channelizing all the efforts in a single direction. There are some major policies of the organization and some minor or basic policies whose main goal is to follow the major policy. There may be different policies framed by different departments and divisions, so to avoid chaos and bring orderliness in the working of the organization.
With existing policies it becomes easy to take further decisions without wastage of time or efforts. There are different policies whose main aim is to bring discipline in the organization. Such as purchase policy, sales policy, pricing policy, recruitment policy etc.
For example: a company may have a policy to not buy raw materials on credit.
Procedure is the list of specific steps to be followed to complete the activity or task. It specifies the manner in which the work will be completed or carried out. Procedures are usually for the internal environment such as employees, investors, shareholders etc. these are the chronological steps which should be followed by each person in an organization so to avoid chaos and problems. Policies and procedures go hand in hand. Procedures are the steps to be followed under the policy framework.
For example: Procedure followed by the organization for recruitment, selection or training of a candidate.
Method is the way in which the task will be performed. It deals with one step of the procedure and specifies how that step will be performed. It is closely related to the procedure. Methods may not always be the same. With changing tasks, the methods will also change. Since there is no particular method in which the task can be performed so the evaluation is done and a best way or method is selected.
They help in giving the clear instructions to the employees and workers and thus help in brining uniformity and standardization in the work.
For example: for recruitment of a candidate as an employee, first he or she must attend the seminar, then some lectures must be attended and then undergo on the job training. This may be the method taken up by the organization to appoint personnel.
As policies are some general statements, rules are the specific statements. They are rigid in nature and do not allow any changes. These are to be mandatorily followed and not following them may bring severe effects or consequences. They help in brining discipline in the organization. They even involve punishments on non – compliance.
For example: ‘no smoking’ in the premises of the organization. Not transferring any information to the outsider.
Programme is the statement or details which is the mixture of different types of plans. It includes policies, rules, and procedures for achieving the objectives. It is an entire set of activities which helps in overall achievement of an objective. It helps in systematic working of an organization. It requires involvement of different levels.
For example: production of the product will be the programme and other plans will systematically follow.
Budget is a quantitative plan. It deals with facts, figures and numbers. It is prepared for allocating the resources for different activities. Budget may not always be related to money but may also be related to number of workers required at different times of the year.
Budget is very useful in comparison of actual performance and the standard performance. It is usually based on the past figures or forecasts.
For example: budget prepared for advertisement. Proper allocation of resources will be done to get best possible results from advertisements.
Different plans are required for different activities. These plans are required for brining uniformity, standardisation and discipline in an organization. Plans are also important for controlling. They act as a standard performance and then the actual performance can be compared with it. These plans have different goals but they work in a direction for achieving the objectives of the organization.