In order to accomplish the targets, the management of a business organization chalks out different types of plans. The important types of plans are explained below:
Types of plans
1. Single-use plans:
A single-use plan is developed for a one-time event or project. The examples are
- Budgets
- Programmes
- Projects
2. Standing Plans:
A standing plan is used for activities that occur regularly over a period of time. The examples are
1. Policies
2. Procedures
3. Methods
4. Rules
3. The other plans include strategies and objectives.
Brief explanation of the various types of plans are as follows:
1. Objectives:
1. Objectives are the end points towards which the activities of an organization are directed. They are said to be the desired future position that the management would like to reach.
2. Objectives are very basic to the organization which the organization wants to achieve by its operations.
3. Objectives are set by the top management. They lay down guidelines for the activities and serves as a bench mark for measuring the performance of an organization.
4. Objectives need to be expressed in specific terms. They should be expressed in quantitative and measurable terms. They are also to be put in the form of written statements and they represent the desired results to be achieved in a given period of time.
2. Strategies:
A strategy provides the broad contours of an organization’s business. Strategies are the specific programmes of action for achieving the objectives of the organization by employing the organization’s resources efficiently and effectively.
A strategy is a comprehensive plan which acts as a guideline to handle specific problems. Major strategic decisions will include decisions like whether the organization will continue to be in the same line of business, or combine new lines of activity with the existing business or seek to acquire a dominant position in the same market.
3. Policy:
- Policies are general statements that guide thinking.
- Policies provide a basis for interpreting strategy.
- Policy is a guide to managerial action and decision in the implementation of strategy. Strategies are formulated by top management.
Formulation of strategy involves the following aspects:
1. Determination of the long term objectives
2. Adopting a course of action to achieve the objectives and
3. Allocating resources necessary to achieve the objectives.
4. Procedure:
- Procedures are routine steps on how to carry out activities. They detail the exact manner in which any work is to be performed.
- Procedures are the guidelines to action and they are usually intended to the works which are repetitive in nature.
- Examples of procedure include procedure for execution of the customer’s order for supply of goods and procedure for recruitment of employees in an organisation.
5. Methods:
- Methods provide the prescribed ways 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.
- Method has a limited scope compared to the procedure.
- Examples of methods include training the employees under off the job training method, remunerating the salesmen under bonus and commission method, etc.
6. Rules:
- Rules are specific statements that inform what is to be done.
- Every organization likes to operate in an orderly way. For this purpose it is necessary for the business organization to lay down certain rules.
- Rules are the specific statements which prescribe the code of behavior to the people of an organization.
- Rules are rigid. Their violation attracts penalty and disciplinary action.
- An example of a rule is ‘wear identity cards compulsorily at the work place
7. Programmes:
- Programmes are detailed statements about a project which outlines the objectives, policies, procedures, rules, tasks, human and physical resources required.
- A program is a precise plan which lays down the operations to be carried out to accomplish a given task with in a specified period of time.
- Programmes are framed for the works which are nonrepetitive in nature.
- An example for a programme includes sale of 5000 cars in the month of March, 2019.
8. Budget:
- Budget is a statement of expected results expressed in numerical terms.
- Budget is a plan which expresses the future facts and figures in quantitative terms for a specified period.
- Budget is considered a control device: An example for a budget is a sales budget which forecasts the sales of different products in each area for a particular period.
Conclusion: The success of the business depends to a large extent on the effective planning. Thus, the logical and scientific planning must go through the above steps.
