Planning is an essential function of business.

Effective planning is crucial for every

business to achieve the desired goals effectively. The following are the four key
types of planning in management.

Strategic Planning
Definition: Strategic planning is like a roadmap for a company’s long journey. It’s a
big-picture plan that guides where the company wants to go and how it aims to get
there.
Purpose: Think of it as setting the ultimate destination for a road trip. It defines the
company’s goals, vision, and the main strategies to achieve them. It’s a big dream.
Operational Planning
Definition: Operational planning is the day-to-day plan that keeps the
company running smoothly. It’s like the to-do list for each day, making sure everyone
knows what needs to be done.
Purpose: If strategic planning is the big dream, operational planning is the practical
step to make it happen. It’s about managing resources, tasks, and deadlines
efficiently.
Tactical Planning
Definition: Tactical planning is like a playbook for a sports team. It’s about making
specific, short-term moves to score points and win the game. In business, it’s all
about the specific details of a business.
Purpose: Think of this type of planning as breaking down the big goals from
strategic planning into smaller, achievable actions. Tactical planning tells us exactly
what to do, like a game plan for success.
Contingency Planning
Definition: Contingency planning is like having a backup plan for when things go
wrong. It’s preparing for unexpected twists and turns, much like having a spare tire in
your car.
Purpose: This type of planning is all about being ready for surprises. It’s like having a
fire escape plan in case of emergencies. It helps a company respond to unexpected
challenges effectively.
Types of Plan
To provide guidelines to the managers for taking decisions and solving problems,
there are various kinds of plans. These plans are helpful in managing day-to-day
affairs and in regulating the work behaviour of the subordinates. These various
types of plans are grouped into two categories that are standing plans and single-
use plans.
I. Standing Plans
Standing plans are those plans which are used again and again whenever a
particular situation arises. It is designed to make sure that the internal operations of
an enterprise run smoothly. These plans are developed once but are designed to be
used over the years. It is generally developed in such a manner that it can be
modified when needed. These plans are also known as multiple-use plans or
repeated-use plans. These plans are generally prepared by top-level managers.
Standing plans include objectives and goals, strategy, policy, procedure, rules, and
methods. The following are explained below:
1. Objectives and Goals
Both the terms are used interchangeably, as both imply the target one desires to
accomplish. Goals are the desired set of affairs that an organization wants to
accomplish. Whereas objectives are specific targets within the general goal to
achieve a certain task. Thus, objectives are specific with support in the attainment of
goals. The process of planning begins with the setting up of objectives. The
planning stage includes courses of action and identifies the results that the
company desires. These are usually set up by the top level. All organizations large or
small can identify problems and establish overall goals for their business, but they
need specific objectives to progress.
2. Strategy
The term strategy is mostly used in military science and games. But in view of
growing competition and a rapidly changing environment, now it has become
equally relevant to the business organization. In business, it refers to a
comprehensive (i.e., determining long-term objectives, adopting a course of action,
and allocation of resources) and an integrated plan, which indicates the desired
future of the organization. It is very often said that a proper strategy is the blueprint
of an organization’s desired destination. It is an elaborate, systematic and special
type of plan, which is formulated to meet the challenges forwarded by the
competitors or other external factors, such as changes in the economic, political,
social, legal, and technological environment. It involves preparing itself for meeting
unforeseen factors.
3. Policy
The policy is a general statement that guides thinking or channelizing energy
towards a particular direction. It also defines boundaries within which the decision
can be made. It is a parameter within which managers use their discretion to apply
the policy. There are policies for all levels and departments in the organization. There
are major company policies that are common for all customers, clients, competitors,
etc. Whereas minor policies are for the insiders of an organization and mainly
contain minute details of information important to the employees.
4. Procedures
A procedure refers to a particular course of action in order to achieve the desired
result. Basically, it is a series of chronological steps to be taken to perform an
activity. It simplifies the work by eliminating unnecessary steps and brings
uniformity of action. Procedures may bring rigidity in the working of all
organizations by specifying the best way of doing it. It tends to become outdated
unless reviewed and revised at periodic intervals. It provides no room for creative
thinking and at times discourages initiatives

5. Rules
Rules are a set of directives or statements to do or not to do certain things, to behave
or not to behave in a particular way. Every organization aims to operate in an orderly
manner to regulate and control the working behaviour of employees. Rules are
formed by the organization and these are enforced to maintain. They are rigid and
do not allow derivations. The breach of rules usually carries a penalty. It aims to
maintain discipline and thereby helps to improve efficiency. Any violation of the rule
is generally associated with some sort of disciplinary action.
6. Method
Methods are formalized techniques and standard ways of doing repetitive and
routine jobs. It prescribes the manner of doing the task. They also provide detailed
guidance for day-to-day activities and are helpful in the use of procedures with
minimum expenditure of time, effort, and money. The method specifies the manner
in which a work can be performed effectively and efficiently. It should be stated
clearly and in precise terms to improve organizational efficiency and bring a sense of
order to the workplace. It is a prescribed way in which one step of the procedure is to
be performed. Specified techniques are to be used in a particular operation.
II. Single-use Plans
Single-use plans are made to serve a specific objective. They cease to exist once
such an objective is achieved. They are nonrecurring and the duration of this plan
generally depends upon the type of project. These plans are short-lived and they
have to be reformulated after every use. These plans include programme and budget,
following are explained below:
1. Programme
Programmes are comprehensive plans designed to implement the policies and
accomplish the objective by combining goals, task assignments, policies, resources,
etc. They are usually single-use plans indicating the steps to be taken, resources to
be used, and the period for completion of the task. It gives a step-by-step approach
to guide the action necessary to reach a pre-determined goal. There are two types of
programmes major and minor. Major programmes are basic plans for example- the
poverty eradication programme. Minor programmes are derivative programmes
designed to implement major programmes.
2. Budget
According to George. R. Terry,” a budget is an estimate of future needs arranged to
an orderly basis covering some or all of the activities of an enterprise for a definite
period of time”. A budget is a statement of expected results that are expressed in
numerical terms for a definite period. It is a single-use plan expressed in quantitative
terms. It is a projection of anticipated cost results and the allocation of resources. On
one hand, it is an instrument of planning, as it helps to make the plans clear, on the
other hand, it is an instrument of control, as it serves as a standard for evaluating
performance. It is prepared for one year.